A few things...
One, I guess I should have been more clear, I wanted to be told why this was a bad idea from a technical standpoint, not a balance one. Balance is the whole reason I'm doing this, after all... I just wanted to be sure it would work
Two, as has sort of been pointed out, I've added these as permanent abilities, so things such as spell expiry and dispel are not a concern.
Three, as this is an edit of Morrowind Advanced (which seeks to make the game harder), I really have no problem with every Golden Saint busting out a Daedric Longsword on me. Only higher-level Dremoras are given Battle Axes, though (the rest are given Spears).
Four, scripting is always an option for someone who wants to add more variety (as Fliggerty pointed out, a script could on rare occasion give an actual weapon to the creature in question while removing the bound one). Again, this isn't really a concern for me, since I am of the belief that Daedric equipment *should* be rare and very hard to find. While I *do* agree with Fliggerty on the concept of random drops, I would want to restrict that functionality to equipment that 1) cannot be found by any other means and 2) thus have their values set extremely low so as to not break the economy if you manage to acquire a whole mess of them.