Trimmed and boiled down, the problem with the leveling system is that, as many have mentioned, it simply outright punishes you for trying out all of the game features.

I don't mind that you get punished for trying to be the God-King of every aspect of life.

However, I do mind that leveling non-combat related skills is actually detrimental to you. Like, if you could get through most quests by specializing in speech/lockpicking/pickpocketing/etc etc, then I would be like 'Okay'. But you can't. If you aren't a full/almost-full combat build, you're screwed.

This is one of the two things i "hate" about the game.

Skyrim with the Morrowind skill-system (WHY LORD, WHY DID YOU REMOVE ATHLETICS AND ACROBATICS!?) and with a proper UI that is not made for consoles would make it the best game i've ever played.

Eager to see if any mods to improve this pops up!

when you're short on gold, 10k spent on making iron daggers can get you to level 60 smithing which can get you some pretty good equipment and well worth investing the perks and money in. But as op said I agree that they should separate combat level from other perks similar to what they do in runescape but they streamlined the game for the average 10 year old to understand while most players are probably advlts or close to advlthood.

I have not run into any issues of level scaling causing me frustration or death. I havent walked into a barrow and only fought draugr deathlords or bandit chiefs. Hell since level 5 dragons have never killed me on the default difficulty as a dual wielding warrior in heavy armour. hell even Alduiin was dead in 3 power attacks and he scales to be higher level than me. i was 37 when i killed him. all i did was make sure my gear was in perfect condition at all times and i didnt grind any non used skills. all my perks are in1 handed, heavy armour, enchanting and smithing.

If you make sure your main offensive and defences perk tress are at at a sufficient level, then grinding your least used skills becomes no issue oh and smithing is not a waste of a tree, if anything it and enchanting are almost mandatory for theives and warrior based classes. without smithing theres no way you will get 1 handed weapons to do over 100 damage per swing with out enchantments and it wont allow you get your dwarven armour to 500 armour rating either.

I do agree that levelling your non combat skills severely hurts you. Maybe you want to try out smithing, so you gain say 5 levels. The enemies are 5 levels tougher your armour/block/weapon skills have NOT changed. Definitely think there is need for a distinction on this. I'll pick up the PC version after I complete the 360 version (always play the game the way it's intended first) and mod it.

With the PC version...I know this is off topic...but given what could've been done in the past...there will be mods that control the leveled lists based on your combat related skills. Probably some average of your armor/magic/weapons stats or perks. The way I've always done decent in ES games is to focus on 2 main combat skills, 1 minor combat related skill....all the rest I level only after I'm strong enough. Until Bethesda begins to seperate combat/non-combat skills this will always be the best way to play.