Although it works in the game, there is no literary tradition for acquiring magical weapons and trading them in for better magical weapons as time goes by and character levels go up. There is no attachment to these D&D magical weapons, and much like any other tool they are discarded as better tools come along. I find this to be unsatisfying. When as a player I tried to have my character do more with a weapon: name my magical +1 weapon and become attached to it, and known as the wielder of said weapon of great renown.... it all goes out the window when the +2 weapon comes along.
I suppose not everyone can have Excalibur, Chrysaor, Nothung, Glamdring, Stormbringer or a the vorpal sword that slew the Jabberwock snicker-snack. But there must be something between Orcrist and the disposable +x weapon in the treasure pile that fits into our adventure. Sure there are tables in the back of the book (regardless what book/edition you have) which speak of powerful weapons and artifacts that only a fool would relinquish. In practice it may be true but for most of our campaigns characters would only acquire such a device near the end of their career. This does not allow them to build a story and reputation expect maybe as the guy powerful enough to slay the terrible beast that had the legendary weapon in its hoard and thus became the next hero to retire (because the campaign was over) with that legendary weapon. Not satisfying at all in my book.
It always seemed to me the solution was to have the character acquire a weapon which, much like the character herself, needed to grow to their full potential. Sure the weapon may start out as just a pretty looking master work tool, but over time it would gain pluses to hit, unique capabilities, elemental properties (spouting flame, dripping caustic acid, etc), gaining fame as the character did. It may even have a temperament and its own agenda that is in some conflict with the bearer. Sounds like fun!
I know there are a number of systems out their that support such a progression. I did not find one I liked, so I made my own. The challenges have been many. I do not want the weapons to outshine the characters. Characters owning such a weapon often unbalance the game. Creating weapons and a history so that all the characters can participate in this high fantasy romp without it seeming too contrived. (who would want to be left out of the fun!). I decided that the characters had to actively pursue goals and rituals that would unlock the weapons potentials as they grew in power. This also had the beneficial side effect of creating adventure motivation and consuming resources.
It has been an interesting experiment, and I trust my players are enjoying it. One of the interesting things I did was give the characters an opportunity to rename their weapon - they could keep its legendary name, or they could rename it formally. Weapons with such prestigious names as Silver Flame, Ice Wand, Ivory Stary & Argentum Valor have come into the hands of the characters. It has not all been perfect, but I think the challenges have been worth the outcome: an interesting campaign where characters have weapons of legend, and are creating more legend of the weapon and more importantly, the wielder.