My point is that there should never, ever be an upper limit to how powerful your character can become. Well, except for the obvious fact that Bethesda can't program an infinite game, my point is that "too powerful" is a misnomer. Nothing is too powerful for a TES game. Balance should be about the other factors. For instance:
If smithing seems too powerful, it's probably because you can level it much faster compared to other skills. (Thus, the balance is in the skill levelling, not the power you can create)
If enchanting seems too powerful, it's probably because other skills don't scale high enough to compare. (Destruction, for instance, caps out rather quickly)
The take-away here is that too much power is never a problem in TES, what needs to be fixed is the other skills that aren't powerful enough. Furthermore, increase the amount of effort that it takes to become the premiere grandmaster smith that you wish to become, so that it seems more appropriate when you get there. Years spent forging every conceivable type of armor netting you the experience necessary to create the most powerful protection imaginable... well that makes sense. Crafting 450 iron daggers? Well, that's probably a stretch.
You see where I'm going with this? Nerf nothing! Buffs and balance is about ratios, not about hard caps on the upper limit.
EDIT:
I'm not making one point clearly enough for most, so I'll repost it here.
In order to keep progressing, then, you need to make something fancier, like steel, elven, glass. You should not be able to become the best smith in Skyrim without working with any of the more complex or advanced materials.
This is key. It doesn't bother me that I can level smithing to 100 in an hour. If you figure out a way to make that happen, fine. What bothers me is that I can do it in an hour with iron daggers only. The comparison is not logical at all. To become a master smith, capable of refining the most advanced dragon bone armor in the game, I should need to have experience in all sorts of different armors.
That's why smithing needs to level in a way that is exponential, not linear. I should not get the same XP for an iron dagger that I get for daedric armor.