Just be careful about making Craft Magic Arms and Armor obsolete... unless you want to, of course. And certainly not every blade has the ability to grow into a +2 Keen, Vorpal, Evil Outsider Bane.
I do think that a weapon that scales deserves a backstory, and the backstory in conjunction with the PC's actions and attitudes steer the scaled bonuses.
In this case, the decision is made by the DM and his/her observations of the character. Certainly the first bonus would be a +1, but unless you have it pre-scripted or tied to the weapon's history, the second should be tagged as a story reward any time the cash/item value equals the bonus. If say the character does the 'Fighting Defensively' thing a lot then adding 'Defender" makes sense. Adding the Defender quality to a +1 weapon would cost 2,000 gp (if I remember correctly) so if at the end of a long dungeon slog a book of ritual is found with a wad of cash, well, the rest of the party gets the cash and the one character gets the defender bonus.
Personally, I'd encourage taking Craft Magic Arms and Armor so the character can decide what the next upgrade will be. Leaving it up to the DM is always exciting.