Its broken, even at high levels daedric weaponry is extremely rare and armor is even more rare, nearly impossible to get without forging, using the arcane forge in the college or cheats.
I wouldn't say broken. I've found Daedric armor and gauntlets before, and dragon bone and dragon scale helmets and gauntlets. The problem is the chance to find a full set is stupidly low since you will more than likely find 2 or more of the same pieces.
Honeslty I think smithing really took a lot out of the looting experience. I actually dont use smithing much any more either. I usually just take the steel perk and use Skyforge weapons or something.