The latest version (requires Dawnguard and Dragonborn DLC packs) is also available on Steam Workshop if you prefer the convenience of one-click subscription and automatic updates:
http://steamcommunity.com/sharedfiles/filedetails/?id=87761363

This mod slightly alters the statistics of some of Skyrim's artifacts (unique, powerful player-equippable items scattered throughout the world or given as quest rewards) to maintain balance with player-created items while increasing compliance with the rich lore of the Elder Scrolls universe. Many other artifact rebalance mods exist, but I was unsatisfied with them due to a lack of lore-friendliness.

This mod modifies numerous Daedric Artifacts (weapons and armor alike), most of the Dragon Priest masks, many legendary weapons, and a few jewelry items (mostly for Mage-oriented players). Please leave a comment if an artifact you feel is underpowered has not been modified, or if you disagree with some of my alterations.

Please note: If you have only the vanilla game, use Version 1.3.4. If you have only Dawnguard DLC, use Version 1.4.1. Versions 1.4 and above require Dawnguard DLC, and Versions 1.5 and above require both Dawnguard and Dragonborn DLC packs.

What's New in 1.5:

(The belated Dragonborn Update, thanks to ULikeMyPony for suggesting some ideas for changes)

Miraak (mask)
(Note: I changed a script attached to the mask; if you already have it, drop it from your inventory and pick it back up again to "update" it.)
Removed level-specific versioning of item; regardless of your level, the mask's statistics will remain the same (same as the other Dragon Priest masks).
Changed to Light Armor to better suit a typical Mage playstyle; armor rating decreased to 21 and weight decreased to 5 to match.
Increased magnitude of Fortify Magicka ability to 100.
Added Benthic Scream shout ability designed but not implemented by Bethesda for some reason, with some slight tweaking on my end (added a 15-second cooldown).
Added a tempering recipe: 1 Ebony Ingot, 1 Daedra Heart.
Material classification: Dragon (for perk-augmented grindstone improvement).

Ahzidal
Changed to Light Armor to better suit a typical Mage playstyle; armor rating decreased to 21 and weight decreased to 5 to match.
Material classification: Dragon (for perk-augmented grindstone improvement).

Dukaan
Changed to Light Armor to better suit a typical Mage playstyle; armor rating decreased to 21 and weight decreased to 5 to match.
Material classification: Dragon (for perk-augmented grindstone improvement).

Zahkriisos
Changed to Light Armor to better suit a typical Mage playstyle; armor rating decreased to 21 and weight decreased to 5 to match.
Material classification: Dragon (for perk-augmented grindstone improvement).

Bloodskal Blade
Base damage increased to 23 (same as Stahlrim Greatsword).
Energy blast damage increased to 50.

Miraak's Sword
(Note: Changes only applied to player-character-usable version; no need to make Miraak even tougher to fight.)
Across all leveled versions, reach increased to 1.2 and speed increased to 1.1.
Across all leveled versions, added Poison Damage (same as that of the Poison Rune introduced in this DLC) enchantment of identical potency to the existing Absorb Stamina enchantment.
Increased magnitude of enchantments as follows: 30 in the Levels 1-44 verson, 40 in the Levels 45-59 version, and 50 in the Levels 60 and up version.
Across all leveled versions, charges are infinite.
Across all leveled versions: Material classification: Daedric (for perk-augmented grindstone improvement).

Miraak's Boots
Reclassified as clothing; armor rating decreased to 0.

Miraak's Gloves
Reclassified as clothing; armor rating decreased to 0.

Cultist Gloves
Armor rating decreased to 0 (match with the rest); weight commensurately decreased to 1.
Now classified as clothing as opposed to Light Armor (match with the rest).

Cultist Mask
Armor rating decreased to 0 (match with the rest); weight commensurately decreased to 1.
Now classified as clothing as opposed to Heavy Armor (match with the rest).

Telvanni Robes
Magnitude of Magicka Regeneration enchantment increased to 125%.
(This change is only applied to the player-accessible variant; Neloth's 150%-magnitude robes are left intact)

Installation/Updating Instructions (Nexus version only):
Simply unzip the file (either through Windows Explorer or through a program such as 7-Zip or WinRAR) and copy the LoreFriendlyArtifactRebalance.esp file to the Data folder in your Skyrim installation directory (generally in \Program Files\Steam\SteamApps\Common\Skyrim). Make sure the file is checked in the Skyrim Launcher's Data Files section and enjoy!
Alternately, use the Nexus Mod Manager, which automates the process for you.
The Steam Workshop version automatically installs and updates the mod for you, so I recommend subscribing to it there if you own the Dawnguard and Dragonborn DLC packs.

Compatibility:
Compatible with Dragonborn, Hearthfire, Dawnguard and Skyrim 1.9. Earlier versions of Skyrim should work (pre-1.7 not tested), requires Dawnguard (versions 1.4 and above) and Dragonborn (versions 1.5 and above) but should work without Hearthfire.
Compatible with any mod that does not modify the statistics or enchantments of the artifacts listed in the full changelog. To minimize conflicts, put this mod last in your load order.

Click on the "Read Me" tab (exclamation point inside gear) to view the full changelog.

Please provide feedback on the mod through the comments section either here or on Steam Workshop. If you like it, I'd appreciate it if you endorsed it here, and/or rated it up/favorited it on Steam Workshop.