Yep, I think we all see that it would be cool to have greater damage on an enchant with knockback, and we all see the attraction of being able to put that enchant on any weapon. But it seems to me that this would be overpowered ... and the absence of those things doesn't make the Bloodskal blade a bad weapon: it's a pretty good weapon.
It's a single player game. Nothing is overpowered, and everything is optional.
If YOU don't think a weapon should do that much damage, fine. Don't use it. You're probably not using it anyway, so what would it matter if it were stronger?
This whole notion of "oh, that's OP and I don't like 1-shotting enemies, so nobody should be able to do it" is moronic. It's an RPG. Play the game how you want to play it. Too many people on here looking down their noses at other players simply for doing things that the game is made to allow them to do.
At any rate, I agree with OP. I used the sword to open the door and then switched back to my bow half way through my fight with the dragon priest in the main chamber. The sword was just way too weak to be used as a viable weapon.
It is relatively bad game design, in my opinion, when the unique weapons that you can find are definitively weaker than any of the non-unique weapons that you could craft. Why should anyone use those unique weapons if there's simply a better option?
And yes... before anyone says anything... crafted weapons ARE BETTER options. There's no opinion that anyone can have that says otherwise. Even if you somehow think you're more "honorable" or whatever for using a weak weapon, any weapon that does more damage is a better weapon. Period. End of story. Don't use it if you want, it's still BETTER.