You still get speed penalties for the medium and heavy armors at 7 smithies, they just soak more damage. Just compare robes and leather armor, tier by tier, and robes are always better, while both have no speed penalty.
I did end up with 7 smithies at the endgame, I just found myself constantly having to worry about iron to maintain them, and my reward was being able to keep my fighters in weak leather armor to avoid speed penalties, and only giving the mage a wand, because come on, the fighters are expected to wear armor and not wave a wand around at people. I wouldn't really repeat the same thing again. Even if you never plan on using spells, it's a 5 skill point detour to get Magery and Raw Power, +3 Energy, and unlock Tier 3 Arcane Gear and have everyone rocking those Robes/Vestments/Wands and never being forced to building more than 1 Smithy to install Runes/Augmentations.