I remember getting Dak'kon's Zerth Blade in Baldur's Gate 2 and having it for the entire game and not really having a problem with that. The D&D comparison isn't really apt though, as you'd have to scale damage with stats only; afaik there is no concept of "leveled items" in D&D. (Though I did stop at 3rd edition).
It seems like Larian tried to strike a balance between leveled loot and unique lore based items, but I don't think you can really have both comfortably. Take some high-fantasy sword like Glamdring from the Tolkien universe. The idea behind loot in D&D was to bring the experience of finding a sword like that (plus other fantasy fiction concepts) to a game. You don't have a story where Gandalf throws out Glamdring halfway through the adventure because he finds a better sword. It's freaking Glamdring.
The ideal for me would be for this D&D, lore based system where all the loot is "unleveled". Meaning everything has numbers in the same range and these get multiplied by skills, stats and perks. Merchants can have less selection too, I'd be fine with that. I realize this is a huge rewrite, would break savegames and piss a lot of people off who like the system as-is. So it's best left to a mod or a future game.
