I prefer my weapons to look believable and practical. Corkscrew helix blades and giant masses of Iron might look "Sooper azomes" but I'll always prefer things more in line with real-world weapons.
That said, I think a lot of people would be shocked at how weird a real blade or weapon can look. The Khopesh comes to mind.
And I say, albiet incredibly late to the game, that there is no problem with weapons being designed to be "sooper azomes" and trying to just frame it as such is a bit disengenous and pompous, as it makes the issue into one of "Well, I'm correct, and you are obviously incorrect" instead of this being a simple discussion between two peers of video games on the merits and cons of sheathes versus weapon design.
Speaking of which, realistic designs have nothing to do with whether a blade will or will not have a sheath proper or be floating on ones back. Your ideal doesn't really address the problem. Because if you were to only draw from the real world for inspiration, and say you wanted to include your khopesh, a flammenschwert, a talwar, and just to be way out there, a parang machete, your lead designer would still need to make widely different sheaths for each and every type of varient of weapon there was. So what ends up happening instead? The same thing they did in DAO, cloned gear. All gear ends up looking the same, just recolored or retextured to make it seem different, and you do it to create uniformity to make it easier for the creation of sheaths for all weapons.
Given that conundrum, which I view as existing, I would say more varied weapon designs are more important than having weapons have a sheath.