I agree with there only being one of the item per server, but I don't like the idea of it making you godly, or being taken away. Make each one an absolute pain in the ass to get, through more than just health bars and DPS. Throw in some puzzles, maybe a little platformin (depending on how tight the controls are) and let whoever gets it, keep it. Make them all have marginally better stats than the best craftable equal, and add unique and interesting enchantments (and mixes thereof).
You could either keep it, or sell it for a [censored] amount of gold.
Just me.

EDIT: Though, add in a failsafe that if the character that owns it hasn't been played for X amount of days (weeks / months), and met X critera in those hours (nothing too extreme; traveled to so many zones, killed so many people in PvP, etc), then the item resets. It should be more than just logging in, because someone could just jump on for a minute, then go play an alt, and never even use the bloody thing. At the same time, it shouldn't force you to spend stupid amounts of time just to keep an item you worked for.