You should be scouting particular vendors by your level.
Items of level 16+ i believe start having +2 of certain stats. It's at this point I start replacing some of the better legendaries I found earlier in the game.
Crafting I've found is best for weapon creation and armor/weapon enhancement.
The biggest benefit being adding resistances.
AFAIK you cannot craft legendary items. Though crafting skill books and enhancing your equipment certainly makes it worth investing in a crafter/blacksmith.
