It's still vital. Still need it to make a luck suit. Still need it for PvM weapons. I think it nicely complements the loot system. The balance between crafted and looted gear is better in UO than in most other MMOs.
Crafting still has its uses along with bulk orders for super tools. we lost a great deal of players over the years to war monger Dev team's of the past. Tp them a crafter had little use. Mesanna and her people have been working on making it more player useful
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Some say better but I say you can get just as good stuff making it yourself.
I like the control of picking exactly what my gear has on it. So I mainly make my stuff, but thats just me.
With imbuing and reforging you can get to all the caps but it takes more different effort than just going out and killing a boss for legendary loot.