That just means that the vanguard sundering isn't very good, not that sundering doesn't work. Try a large unwieldy weapon made of adamantine and run it again.
The problem isn't that it doesn't work so much that you're wrecking your own loot.
It still seems like there would be a problem with hp, cuz even assuming you get adamantine weapons (which is feasible at mid-levels if you're prepared to pay out a bit extra) you still have to face the 5+3*lvl hp.
Which by 10nth lvl is 35 hp.According to my maths you still would need to attack a lvl 10 item (with me running this with a lvl 11 advanced melee weapon with 4d8dmg) about 6.25 times. yikes. Another note, adamantine's "ignore hardness" thing only works up to 30 hardness, meaning that once you hit lvl 13 your adamantine items don't even work any more. (cuz the hardness reaches 5+2x(13)= 31)
On another note, I take your point about destroying loot, I just would have hoped this could be slightly more viable. (otherwise my party may as well try and kidnap a rust monster instead)