From what I've been able to tell, the main beef against Weapons of Legacy is that the rules actually expect you to pay meaningful penalties for weapon powers that are far, far beyond what you'd normally get for the same amount of gold.
People would have been fine, for instance, if the penalties for a weapon's combat powers were things like "-2 on Diplomacy checks," because for the vast majority of melee-oriented PCs, "-2 on Diplomacy checks" is meaningless. On the other hand, "-4 HP" or "-1 to all attacks" is a trade-off that isn't a no-brainer.
In other words, weapons of legacy, by the book, were balanced, and that's not what people -- me, included, at first -- expected. As such, using them is mostly a matter of whether the DM and the players want the flavor of a weapon that grows in power with the character.
Can DMs and players work out another way of doing a similar idea, without the inherent balance of meaningful game-mechanical penalties? Of course, and in many games that will be a superior way to do things. But if you want weapons of legacy that are game-mechanically balanced, and already created for you (including rules for making your own), Weapons of Legacy is a fine book.
FWIW, my DM gave a PC a weapon of legacy (a longbow) and vastly nerfed the penalties, and the weapon is far, far more powerful than anything the rest of us have. (Including my cleric's self-crafted hammer, a relic of Moradin.) If the player weren't hopelessly inept at both optimization and tactics, the longbow would be extremely unbalancing. (The player's ineptitude might be why the DM was so lenient, but the DM's another one who doesn't like the legacy penalties, so I dunno.)
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