Smithing, like Skyrim, likely has the ability to craft full sets for all level ranges which will probably sell really well for catch-ups and such.
It'd be interesting, however, if smiths could improve armor like they do in Skyrim.
while I think this is a great idea this just wouldn't work in TES as many humanoid creatures would have and drop items such as weapons. But if the gear they dropped were poorly made in comparison to player made then it might balance things out a bit. Hopefully.
That aspect of loot drops always amused me as well. And if only natural or crafting materials (ie. hides, bones, fats, etc) were dropped, it would indeed support a strong crafting community.
I will have to admit tho that TES system is not a crafting centric system and I don't believe the kind of changes you are suggesting will be realized. As much as I like the idea tho
A good idea would be to have armor and weapons degrade (I'm not sure if the do or don't), and allow smiths to create repair kits or something of the sort that would allow you to repair anywhere instead of at an NPC. Another good idea is to allow smiths to improve all weapons and armor in addition to being able to create sets of armor the would be on par or just beneath dungeon/PvP gear for that level.
To add variety you could also have smiths specialize in improving armor/weapons, making heavy or light armor/one handed or two handed weapons, or something along those lines.