Why didn't the original Smith fight Neo in the end?

well, with the eyes of the Oracle, he thought he had the advantage, which he almost did. He a dit further in the fight that he'd seen Neo defeated, and then when Neo got up, he was confused. Also, the Oracle might have had a hand in it, she was still in there, maybe she willed it to be that way. I think it was her that made Smith say "Everything that has a beginning has an end, Neo." I saw that as a kind of signal to Neo, because Smith had always called him Mr. Anderson. Hope that gives a different perspective on things.