I think the problem Datt is referring to is not whether or not the weapon is considered to be epic by virtue of the sum of its "plusses", but rather that any weapon with an enhancement bonus of greater than +5 is considered to be epic. Since a +5 bane weapon would effectively be a +7 weapon versus certain opponents, I can see where that would be confusing.
Hmmm... if I had to guess, I'd say that it does work as stated and that it functions as a +7 weapon versus it's designated foe. This doesn't seem particularly unbalancing since if it's an non-epic campaign, you won't be running into any creatures with a DR of x/+7, and if it IS an epic campaign, your weapon will be more vulnerable to sunder attempts than a regular +7 weapon.
If a DM was going to be particular about it, though, they could rule that you cannot have any enhancement bonus greater than +5 on a non-epic weapon, so that any additional enhancement bonus added by bane that is higher than +5 is wasted (i.e. the bane enchantment would be partially wasted on any weapon with an enhancement bonus higher than +3).