It was mostly useful in 1.09 since rares couldn't match magics on the damage. (Cruel couldn't spawn back then, and I think the best rares had 200%ED/30%IAS).
Besides, that recipe gave three sockets on every try, if the sword (worked with swords only back then) could have that many.
40 chipped gems could get you a Pul in 1.09, but now, with there only being one or two sockets, and rares can have 450%ED/40%IAS/2sockets and more, there is no reason to expect that many people being desperate for chipped gems.
Oh well, rares.. they are actually hard to get (the good ones) but then you look at all the rune words... in 1.09 there was "Fury" and "Silence" that gave 200%ED or so, and DolEldHelIstTirVex is a TAD expensive for 200% and still destructible. You couldn't even cube runes past Thul to get those runes.
Back to topic: In the early stages of playing untwinked, use that recipe to cube staff/wand/scepter and hope for expensive staffmods. I use to buy wands at like 400 gold and then sell for whatever max price the vendors have if it turns out expensive.