Legendary items are really common and don't have any legendary backstory unless we imagine one. There's not much potential for showing them off or for roleplayers other than naming them.

What I'd like to see are quest chains that establish a backstory for weapons. Giving every player a truly unique item like Sting would be impossible, but we could go through a quest chain that gets us one of a group of legendary items, more specific than an entire age. Something along the lines of helping a smith (let's call him Super Dwarf) restoring an ancient forge, getting some special resources (let's say dragon scales) so that we can get or craft not a legendary weapon of the 2nd Age, but a Super Dwarf Dragon Scale weapon. Assume Super Dwarf is someone cool and the style of weapons were used in some legendary war. Pretty standard fantasy rpg stuff.

I wouldn't expect such items to be any better than ones acquired the old fashioned way. Definitely distinct in appearance though, so we can tell a weapon acquired from defeating (insert villain here) from weapon acquired from bartering seals or defeating a variety of old instance villains repeatedly. Different options in the quest line could let us get different appearances to show off our allegiances and adventures. Go with Super Dwarf for a dark dragon scale item or help Awesome Dwarf for a shiny mithril one.