Smithing is a bad skill tree. There are several reasons for this.

1. The tree is arguably designed to give access to the otherwise (nigh) unobtainable Daedric and Dragon gear. These perks are situated at the end of the tree however, so the player is forced to plow through armor sets they conceivably have no need of.

2. The smithing tree is filled with carbon copy perks that are bland and boring. Every single perk unlocks access to a new material set and increases your ability to improve it twofold (with the exception of Arcane Blacksmith). This seems incredibly redundant and appears motivated from a need to just fill out the tree, a poor design decision if there ever was one.

3. Ironically, the capstone skill in this perk tree (Dragon armor originally w/ weapons added in through Dawnguard) is not even the best skill in the tree. Daedric offers up gear that is superior to Dragon in armor rating. In fact, with a perk in any lower armor category, it is possible to improve gear to such an extent that it is competitive with the higher level armors anyway, thus almost eliminating any real need to pursue smithing perks, unless one wants access to the harder to obtain armor for RP or aesthetic reasons.

So, I think it is clear smithing is a mess. I would very much like them to fix this problem for Skyrim NOW, as opposed to making a wishlist for what could be done later. I think this is more than possible to do, and here is how I would go about it.

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

1. Restructure the smithing perk tree

First Tier (skill level = 0,20,40,60,80)
*Smith 0/5 - Increases ability to improve armor and weapons by 20% increments up to 100%

Second Tier (Prerequisite for both is Smith, skill level = 30,50,70)
*Armor smith 0/3 - Can improve armor to mastercrafted status, increasing its armor rating by 10/20/30% and mastercrafted armor degrades 10/20/30% slower.
*Weapon smith 0/3 - Can improve weapons to mastercrafted status, increasing their damage by 5/10/15% and mastercrafted weapons degrade 10/20/30% slower

Third Tier
*(prerequisite Armor smith or Weapon Smith, skill level =60) Arcane Blacksmith - Can improve enchanted weapons and armor
*(prerequisite Armor smith, skill level 50) Expert Armorer 0/1 - Armor no longer falls below "normal" status and offers 5% extra armor rating
*(prerequisite Weapon smith, skill level 50) Weapon Enthusiast 0/1 - All weapons do 5% more damage and weapon wear never falls below "normal"

Fourth Tier (prerequisite either Weapon smith or Armor smith, skill level = 80)
*Unrivaled craftsman 0/1 - Grants the ability to smith extremely rare armor and weapons (Daedric, Dragon, Stahlrim, etc.; basically armor types that are valuable for some aesthetic quality, because they never drop, or because they are just powerful)

Fifth Tier (prerequisite Unrivaled craftsman, skill level = 100)
*Ancient Knowledge 0/1 - Grants the ability to improve legendary artifacts 200% more, reduces charge use with those items by 15%, and protects those artifacts from degradation (These items include Daedric artifacts or armor/weapons that are legendary to the game. Essentially, this perk would make those weapons extremely lucrative to be used over other weapons, which is how is SHOULD be)

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

You obviously saw mention of item degradation, but do not groan! I don't support going back to a system where items can become unusable while we are fighting three Falmer in the depths of the earth. Rather, I propose this.

1. Items can go through three general stages of wear, which are: Battered(50% effectivness), Normal(100% effectiveness), and Mastercrafted(detailed above).

2. Items have a durability intrinsic to each material type, and when an item is used enough it becomes battered. Battered items can be repaired by the player using raw materials at a forge (and can also be improved to mastercrafted status in the same manner once perks are taken) or you can pay a local smith to repair items to normal status.

I think a degradation system gives smiths a reason to actually practice their craft past simply making something and then not having to worry about it anymore. I would be supportive of a similar kind of upkeep system necessary for enchanting too, but that is for another day. Anyway, this is very in depth, so please take time to read it and let me know what you think, I'd appreciate any feedback!

1/2. The player is forced to "learn" how to work with lesser materials before being able to work with higher level and more demanding materials. I don't see how this doesn't make sense. I don't think a character should come bopping out of Helgen, mine some Ebony ore, and then be able to work with Ebony when he's never made so much as an iron dagger or leather helmet in his life.

3. Daedric has better stats because it is imbued with the essence of a divine being. However it is forged from a material that did not just miraculously reappear into the world after an absence of many centuries or even longer. There are smiths alive in Tamriel in 4E 201 who have had experience working with Ebony, Daedra Hearts, and Daedric armor/weapons. However it is highly unlikely that ANY smith alive in Skyrim has any experience at all when it comes to Dragon bones and scales. That's why making Dragon armor requires the highest level of the skill. Not because it's statistically better, Daedric wins there for the reason already stated, but because it is the most strange, uncommon, and difficult material to work with.

I actually really like your whole perk reworking of smithing concept.
Well done.
I agree that it is annoying to get all the perks to just get to what you want (ebony/glass/daedric/dragon) but I kind of like going through 'stages' where I start off with Iron, then work my way up to dwarven/ebony then daedric etc. Kind of really gives that sense of growth.