i don't use smithing. (thanx to this website)
but, if a skill in a game negates the greatness of looting and caches and treasure hunting (enemy killing loot is already less) then i have a big problem with that skill.
looting, etc. might be the top reason why i started playing video games way back when in the first place.
I love looting, especially in these games. That said, I used Smithing on my first Skyrim character, and it didn't stop me from finding great loot. Of course, I only leveled it at the speed that I found & looted materials - I didn't powerlevel it. Generally, I started finding new tiers of gear (scale/elven/glass/etc) in the world before I could craft it. Only hit 100 Smithing at level 48.
And I didn't perk out my Enchanting, so I certainly couldn't craft anything that beat the magic stuff I found. I used my Smithing to make items for equipment slots that I hadn't looted something good for, and for improving the found loot I had. (ex: at one point, I was using: Hide bracers +bow damage; Elven boots +fire resist; Glass shield +frost resist; crafted Glass armor; and crafted Glass sword w/soul trap)
Never really felt that Smithing was overpowered. And always looked forward to what might be in the next chest.

edit: re: the OP's problems - personally, I had plenty of loot progression. Hide to Leather to Scale to Elven to Glass (to Dragonscale, then went back to Glass because the Dragonscale was ugly as heck

) But, then, as many have mentioned - I didn't grind out Dragon armor at level 15.