Robbert Raets
Explorer
Well, bigger and better crafted swords are, as stated by others above here, more useful and less inclined to break when hacking at more sturdy materials/objects. Mages and priests in fantasy games (or stories) imbue magical items with a LOT of power (in D&D, they even sacrifice some of their own experience, iow their 'Life Force'). So a +1 Sword has an exponentially bigger amount of (magical) power behind it than a 'normal' or even masterwork sword. This power can only express itself by increasing the effects the sword has, and most of the sword's effects involve dealing damage to things.