Well, yes, and it's also proof that we can add seals onto weapons in order to do stuff with them.
I don't think we're going to be building a ghetto kusanagi or anything, of course, but we don't need 'A magic sword' in order to use magic with our sword... Sasuke was able to modify Chidori to work with a sword, IIRC, after all.
Dude, that's called slapping seals on a tool.
You could do that with a kunai; in fact, Kakashi does do it with kunai.
Killer Bee does it with a
pencil. There is no sword-exclusive technique you can't apply to a kunai.
Pretty much all the good shit are designed to be used hand to hand first; Rasengan, Chidori, Hell Stab, the Gates et al.
A sword focus is a dangerous dependency in Naruto, given that even legendary weapons like Zabuza's sword and Kakashi's light saber succumbed to battle damage mid-fight. And I still remember what happened to poor Hayate.
I mean, Itachi starts with one in ANBU when he's a youngster, and drops it.
Kakashi started with one when he was also a youngster, and dropped it.Tobi never used one.
Neither did Jiraiya or Tsunade. Sarutobi neither. Says a lot when the top ranks are dominated by unarmed shinobi.
Orochimaru's blade is not a sword; it's a telekinetically controlled drone that can cut through almost anything, trasforms into a snake, returns to it's owner from a distance and is possibly poisoned. Kisame's "sword" is a chakra draining intelligence that has a DRM lock and merges with him to give him a supermode. The Shichiseiken literally seals people's souls when they utter the wrong words too often.
That's the level that actual magic swords worth the name are on.
Which is why there are so few of them.
In the Darwinian world of shinobi, the fact that they aren't training every Academy rugrat in swordsmanship despite the reach advantage you'd get, but take the time to teach shurikenjutsu and kunai use? Pretty suggestive.
Plus our physical aspects still definitely need work given how we were stomped by Kiba.
The Sharingan allows the PC to optimize physical training when necessary; remember how long it took Sasuke to grind Strong Fist style?
It's not like Itachi was the most physical of shinobi anyway.