The blacksmith can be really helpful if you are fighting against the northerners in the holy war, defending against waves and you dont have enough spare armor with you then this guy might save your life and he can help you not lose famed shields so very situational and very expensive since you always have to rebuy them which is kinda annoying. I would put him in crap tier for these 2 specific uses.
Blacksmith in D seems harsh. He is there to save your famed shields in fights vs Chosen and Orcs. A tank surrounded by 3-4 Chosen or Orc Warriors easily loses 100+ durability of shields. You go in with 3 standard Sipar shields in those fights, Feedy?