In normal way yes you can't enchant it, but I think you can enchant it with a sigil stone which you have in your inventory once you have closed an Oblivion gate.
That's a neat idea, and makes sense! Anybody actually done it?
:foodndrink:
EDIT:
I tested it, under differing circumstances:
1. Honorblade as a quest item. The Altar will not let you enchant it.
2. Honorblade as a quest item. With a sigil stone equipped, you cannot enchant it.
3. Honorblade as non-quest item. The Altar will let you enchant it however you like.
4. Honorblade as non-quest item. With a sigil stone equipped you can indeed enchant it.
So, the key is whether it is a quest item. I imagine selling it to Fathis and imediatelly repurchasing would render it a non-quest item, although I did not do any testing of that. (I simply used the command console to change its quest item status.)
Here is some wiki info: http://www.uesp.net/wiki/Oblivion:Sins_of_the_Father#Notes