Another thing,
This most likely is a over-simplification or exaggeration too. It is undoubtly that the average German would not had possesed any metal armor, a sword or any other weapon that would have required lots of iron. But the average German was a farmer not a warrior. He would certainly have had some weapons at home, and would certainly had known how to use them - but with the same certainy we can assume those weapons to have been of a very primitive quality. So, the common German peasant would have had only limited access to iron works. The reason would have been the lacking of urban centres that could have function as centres for craftmanship, as well as the lack of raw iron at all (the Celts were sitting on most of the spots that had iron in northern Europe).
On the other hand we are talking about a people that were military at least on par with the Celts, in their times undoubtly the best smiths in Europe, and that valued smith works high enough to give their swords individual names. So there must have been a group or class in that society that had been able to afford better weapons than simple spears, and that was large enough to do most of the fighting. That would have been the nobles and the retinues, small "private" armies of professional warriors that, from one source or the other, did indeed had access to proper armor and arms.
I would consider the idea of levied peasant armies in Ancient Germany rather an impossibility because that would have required a higher degree of organization than can be attested for those early tribal-"states". Something like that would have come into the sphere of possibility with the Migration Periode, even though I think those kingdoms developed around (now very powerfull) warbands and their leaders too.
That way the armies of the old, such as those commanded by Ariovist or those that had fought under Ariminus at Teuteburg, would rather have been formed as alliances of warbands. As such they would indeed have proper arms and armor, nothing of a seriously poorer quality then the Celts had (whom the Romans protrait as a bunch of half-naked savages too, BTW).
On the other hand, when the Romans made their raids into Germany they hardly did face any form of organized military resitance but rather "local militias", formed on the spot out of whom ever was at hand and equipped in the described extremly poor manner. In those armies indeed we would only find a very small number of men with decent weapons (probably the retinue of a local chief), while the bulk would have been rather pathetical - no match for the Romans with their Celt armor and Spanish swords.
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