Goldbrand was around long before the Hero Of Kvatch got it. The original owner was the "Protector of the Dragons". Maybe it was Talos/ Tiber Septim/ Ysmir.
This is true, it was also the reward for Boethiah's quest in Morrowind. I don't know who the original owner was, but when the player got it in Morrowind and Oblivion, it obviously wasn't used to protect dragons, unless you want to take that as a metaphorical phrase meaning protecting the Empire. But if we go by that logic, then I see no reason to assume it couldn't be used against the dragons we're fighting anyway, since they don't seem to be working for the Empire's best interests. Though maybe Bethesda will play around with this and have it being held by someone who is helping the dragons, we haven't been given any reason to assume the dragons will have humanoid allies, mind you, but I could see Bethesda doing that, after all, the Mythic Dawn served as mortal servents for Mehrunes Dagon, and in Morrowind, we encountered Sixth House servants that had not been turned into horribly mutated monstrosities. More likely, though, it will simply be the reward for Boethia's quest, as it has been in the past.
When I read that book before attaining goldbrand in morrowind, I made it out to look like an epic golden sword...one with amazing amounts of detail and one with a considerably wide blade.
I've always found that Goldbrand looks rather underwhelming than you might expect an epic weapon to be, in both Morrowind and Oblivion, but honestly, I find a lot of the Daedric artifacts don't really look as impressive as you'd expect them to be. I mean, I'm not saying every sword should be an epic thing covered in runes and glowing jewels, but when your legendary artifacts with powerful enchantments somehow manage to look mundane compared to your high-end but non-unique equipment, you have a problem. Of course, they'll probably look better in Skyrim, but the shiny new engine can only enhance them so far if the design remains the same.