I've introduced a couple of legacy items into my game, and they work great with characters that have a lot of backstory. One of them is a necklace once owned by the duelist's ancient elven ancestor (which he has just gotten from a shady fence), and the other is an elven Moonblade. The character who will be getting the Moonblade knows that its a Legacy item, and is reasonably sure she has the Least Legacy feat for it already, but doesn't know where it is. Her personal quest for the campaign is finding it.
IMHO, the Legacy rules are the best way to define that kind of weapon, one linked to a character's geneology rather than just basic class features. For Moonblades, which kill anyone unworthy of it, that's the Least Legacy requirement: survive drawing the blade. Beyond that, just design legacies that fit the family's history/creed/motto/reputation.
The real key to Legacy items overall is the Legacy Quests. You have to make the requirements to fulfill those quests things that the character would really enjoy doing, or it becomes more tedious than dramatic.