WHY is the badass katana looking samurai swords got such a rubbish attack value?

Because "badass" look (Which is subjective) does not equal high damage.

Cause it's either 1000+ years old or at the very least 25+ years... Rust happens.

Valid counter-arguments.

OP, just be glad you can use the grindstone to enhance it's damage.

Proper smithing skill is all I have to say and they rival daedric swords

hardly...

enhanced daedric > enhanced blades sword

If you want to use the blades sword for the look and style... you can minimize your self-imposed penalty through improving via smithing and/or enchanting... but you ARE still using a weapon that is on the lower dmg scale.

not really a problem though... you can use basic steel weapons, iron baded shield, and leather armor if that's what you want your guy to look like and still manage.

Because of http://www.youtube.com/watch?v=XLWzH_1eZsc&feature=related

actaully they have nice damage with smithing not on high levels though around 1 -25 they are decent (with enchanting they are better)

On my thief character his Blades' sword does around 100 damage (can smith but not enchant). Good enough. Can't smith daedric that well as he doesn't have the perk