I'm so glad this had been brought up, because it's 100% correct. Smithing has no place in a game like this as a player skill. It is fundamentally not balanceable, and is not at all immersive. What king or lord or mercenary captain is also a part time amateur smithy, and what part time amateur smithy is also able to churn out the most legendary equipment in all the known lands? It's nonsensical, and even putting aside the lack of immersion and realism, the only play loops it can lead to are tedious grinding until you've broken the game's economy. It's an unrewarding path to an unrewarding reward.
I do think equipment smithing and customization are lovely concepts, and I love the idea of having a crafting system like this in the game... but it needs to be a paid for service. You should be able to visit smiths of various renown throughout the land, gaining access to higher level smiths in certain specialties as you gain influence within a kingdom. For instance, only castle or town owning vassals might have access to the highest level armorer in a faction, who would specialize in a certain area (X faction has the best heavy armor smith, Y faction the best damage weapons Z faction the swiftest weapons, etc). As an independent faction, you can fund and upgrade your own armory, eventually choosing your own unique specialty at the highest level.
This allows for unique arms/armor customization, provides late game content, helps individuate each playthrough, all without breaking the economy as it will always be a cost negative venture (in fact, it will help improve the economy by providing an additional--but optional--money sink for the player character to invest into).