What, do you want to give a +5 bonus?
If a weapon is supposed to be legendary enough to be worthy of the tons of money invested, or dangerous enough to warrant being locked away in a massive underground labyrinth, it better do something more then just +5% accuracy and maybe damage some gargoyles (unless your a mage at which point go ahead and damage it anyway).
+25% hit is also not impressive (and mathmatically annoying). Maybe it can cleanly slice through all metal and stone, divine for heretics, or command demons. Having such a artifact would come with the consequences of having things of such power. A consequential item feels consequential within the world, not just through arbitrary fiat.
High level athletes pay obscene amounts of money for gear that can, at best, provide an almost infinitesimal performance improvement.
But I think it's interesting from a player-psychology standpoint. It's true, for many players, a +1 doesn't feel like a lot. That's even true in cases where it can be mathematically proven to be more beneficial over time. For instance, a flat bonus in 3e is almost always better than a +1d6 damage from an element. In that specific example, it plays to the part of human psychology where a notable (or just larger) boost that shows up periodically is seen as more important than a smaller boost that applies all the time. We don't remember all those times where we needed a 16 to hit, and barely made it because of the +1 bonus, or that combat where 5 hits with a +1 damage bonus resulted in the creature dropping a round earlier. We're a lot more likely to remember a natural 20, or that time we did max damage on a crit, even if it's wasted (e.g. a more normal roll would have killed the monster anyway).
One thing I mentioned earlier is to change the +1 to +3 bonus (I'm working from a B/X reference point, where +3 is the max) to reflect the quality of the weapon. It's not magical, at least not in the way we usually use the term, just exceptionally well balanced, made of the best alloys, and tempered in a way to maximize flexibility and hardness. These weapons can be purchased, though at inflated prices. If a normal sword costs 60 gp, a fine sword (+1) might cost 600 gp. Weaponsmiths of this caliber might be uncommon, and become even rarer as more plusses are involved. The PCs might need to seek out and gain the favor or attention of the most talented artisans, who might be finicky and demanding; or under the patronage or in the employ of some NPC, like a wealthy merchant or powerful noble, who has to give their permission. They might require components, perhaps rare materials like meteoric ore, mithral, or adamantine; or even something like's dragon's breath or being quenched in a holy pool. Or the PCs might have to rely on rare finds, because the skill to make +3 weapons might be entirely lost to today's smiths.
The origin of the weapons may also matter, with the best weapons coming from specific heritages. To borrow from Tolkien, there might be weapons crafted by the elves and by an ancient and powerful human race (Numenoreans). To borrow from history, the steel of Damascus. There might also be mighty weapons crafted by the dwarves. These might be made of different metals, and have different properties that aren't magic in the "wizards made it" sense. Elven weapons might burn the undead, or even light up around goblins, for instance. Others might be especially effective against lycanthropes, or so on. Morgul weapons might inflict woulds that are uncannily hard to heal, or even drain life. Carving through stone might be a property of makes that rely on certain materials. These would be features of these particular makes, and additional magical properties could be added on top.
With the basic bonus being part of the make of the weapon, as well as some of the more subtle properties, the magical part could reflected the showier aspects. If a sword can emulate a spell, that's not part of the make, rather it's some magical property imbued into the weapon. This could be things like becoming a flame or a frost brand, returning to one's hand once thrown, acting as a dowsing rod to find treasure, teleporting, and so on.
To further expand on the magical properties added to a basic make, and borrowing from OD&D where all (all) magical swords are intelligent, intelligence might be the common factor shared by all magical weapons. There might be different sources of intelligence. A blade might gain intelligence from a sacrifice -- plunge the newly forged weapon into the breast of a sapient being, and it steals the soul, which becomes the motive force in the blade. Or from the elements, with swords being imbued with spirits of fire or the earth, wind or water. Or from long use, with legendary and hereditary blades becoming sapient over time, as the spirits of their users rub off. Or a goetic origin, with blades containing the spirits of demons or angels. Or loa, or natural spirits like those from a river or a mountain. It's the intelligence that controls the magical powers of the weapon, and which must be mastered by the wielder, in order to master the powers. Further, the nature of the intelligence defines what powers can be manifested by the blade; if you want a flametongue, you need a fire spirit, or perhaps a demon.
That was unnecacarily snippy of me. I should not have made this a personal deal. Sorry.
Appreciated and respected.