I was thinking that it might make sense to limit the special ability bonuses (ie: keen, holy, etc.) to be <= to the actual enhancement of a weapon or suit of armor.
For example, currently you could craft a +1 keen rapier of holy speed evil outsider bane icy burst. So, this +1 sword gets an extra attack, is +3 vs. evil outsider, crits on a 15, and does an extra 1d6 normally, +1d10 on a crit, +2 more d6 vs. evil, and +2 more d6 if it's also an evil outsider.
I know this is an overstatement, but it could happen. Some sort of limitation might be appropriate.
Another possibility might be to simply limit the number of special abilities = the enhancement bonus.
Thoughts?
I don't see the need for such a limit.
Arguably, a +5 weapon has its usefulness. You'll hit a lot more often, and do more damage to everything you hit. You can afford feats like Power Attack more easily, with all that extra to-hit mojo. It's all good.
Arguably, a +1 weapon with lots of other features has its usefulness too. More crits, speed, flaming damage, etc. But it has limitations, such as you won't hit as often because it is only +1. You won't do as much damage to some things, becuse the weapon is only +1, though you can make it up with the flame (etc.) unless what you're fighting ignores flame damage. Keen doesn't benefit you against everything because some enemies are immune to crits.
So, it's a strategic consideration.
Go with generic weapons that have high enchantment bonus to guarantee a good chance to hit and damage everything.
Or go with low enchantment but lots of special effects that are useful sometimes, useless other times, but hopefully add up to more generic usefulness, at least some of the time, than a high enchantment weapon.
Both are valid options, so why impose artifical limits?
I don't see the need for such a limit.
Arguably, a +5 weapon has its usefulness. You'll hit a lot more often, and do more damage to everything you hit. You can afford feats like Power Attack more easily, with all that extra to-hit mojo. It's all good.
Arguably, a +1 weapon with lots of other features has its usefulness too. More crits, speed, flaming damage, etc. But it has limitations, such as you won't hit as often because it is only +1.
Well, the usual approach is to cast Greater Magic Weapon on the +1 weapon to increase its enhancement bonus (maybe not usual in your game, though). Still, that doesn't help it bypass damage reduction (in Pathfinder, extra "plusses" allow you to bypass damage reduction).
Another possibility might be to simply limit the number of special abilities = the enhancement bonus.
That would be reasonable - I can't think of any Iconic weapons that wouldn't work with this.
It would also somewhat increase the value of the "Burst" weapons - if you can't have +1 shocking & flaming, you might go for +1 shocking burst.
I dont usually go with inflicting limitations witout serious reasons to do so. While that item of the OPs original description is powerful, especially against evil outsiders, I dont really see it blowing balance out the door in a normal high level campaign where a 200,000 gp item is found.
There are many options at that level and on top of that many of the monsters really bite hard too. Also none of that random dice goes into the critical.
And please, oh please, do not add more complications with the special material is required for this level of enhancement. My Fighters and Paladins already have enough to worry their minds about.
Lastly, for casting greater magic weapon to grant the bonus neccesary to overcome DR instead of buying it permanently, the bonuses become available for sale much quicker than your caster acquires the levels required to cast. 4 levels for each enhancement starting at one.