Is Smithing fixed/nerfed yet?

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Maybe I am wrong on this but I have the feeling that lords are not getting 100% the cost of the loot when selling it, and they get some kind of penalty in the same way than the player. If it is the case, reducing all gear cost would not be a problem if this penalty for the AI would be reduced. On the other hand, as far I know, if the equipment cost gets overall reduced, we (and the AI) would be getting more items after every battle according to the loot formula , right (not totally sure about this)?
At least as I programmed reduced prices last year, it doesn't have any outcome of the battle loot(reduced with the method the prices for example for high tier armors, so they cost between 80 and 100k instead of 503k). At least I haven't got anymore loot after I changed this.
 
Fundamentally, the idea that I'd sit around repeatedly crafting weapons until I finally get to the point I can make one I actually want has got to be one of the more bizarre thoughts to pass through TW's collective brain.
 
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