It seems like it's pretty easy (or maybe that's just on lower difficulties here) to find decent armors and weapons early on in the game, without really having to buy or smith much.
For example, on my Viking, a big skill for him would be smithing, but I could already find a good deal of Steel weapons and such before I even got the Steel Smithing perk. For example, you don't need to buy a Skyforge Steel weapon but it's still quite useful for awhile.
A lot of bandit big-wigs appear to have pretty much a full set steel armor if they're bandit leaders, for instance, along with enchanted weapons of all sorts. I've found a whole Dwarven Armor piece (just the main body armor, not gauntlets and such) along with one or two enchanted weaps just sitting in Valheim Towers before. Of course fur and hide armor, iron weapons, etc are quite easy to find too on normal bandits.
Even glass and Ebony weapons/armors I've been able to find, if I remember correctly. Not quite as easily, but I found them.
SO, to answer your question, it may not really be a necessity. If you're rich in the game you could probably just throw down some money on better weapons and armor too, and wait until the next best stuff becomes available.
However where smithing becomes useful is in that in between period, where you can improve what you already have, since you can't get anything better.