I'm constantly tweaking my character for what I think is a balanced play through on master. I've settled on the fact that hitting the armor cap isn't necessary on master. Personally, the game is more interesting where I can easily die if I'm not aware or defending myself. I've settled on my character with an armor rating of 393.

With blocking with a shield I can survive anything if I play defense. If I'm careless I can die. I like that. But now my attention is to my damage output. My sword does 285 damage, dagger does 175, and bow does 267 with steel arrows. I'm trying to find the balance between not being a glass cannon and yet not being a fragile nerf bat striking Draugr Overlords.

So what are your opinions of acceptable damage before you cross the line of being OP in Skyrim in terms of melee combat?

Less than 350, above 150.

It depends entirely on how difficult you want Master difficulty to be. I've seen people play Master with a 100 damage sword and be content with that, while I played it with a 500 damage bow and was content as well.

My general rule is that my weapon must be strong enough to one-hit all but the strongest enemies with a sneak attack critical. Of course Deathlords and Briarhearts are going to put up more of a fight, but I like to be able to take out lesser enemies in one swift hit, considering I'm hidden. If I play a non-sneaking character, I usually settle on 4- or 5-hit kills.