I think true legendary items should be extremely rare and unique. Not just gear with the highest numbers. Having a whole ability or power set tied to them. They should come from a variety of place unexpected. They should be gameplay altering and powerful.
I remember clearly how epic it was that a character in a book that might be a show soon to not spoil created HIS legendary weapon in rare event with a few other characters. Having crafters having very chance to bang out an legendary in extremely rare chances would be awesome.
I think legendary items should be something you can find in the most unlikely places. You get a quest to kill some rats in the attic and he gives you great grandfathers sword also in the attic. 1 in a lottery number chance this a legendary sword. Some obviously should come from legendary foes with legendary gear.
There should also be cursed items that give great power but very drastic draw backs. You find a staff that seems powerful but something is off. It begins to display power the more you use it. Suddenly you after slaying a foe it becomes unremoveable and changes your appearance to a liche. You become killable to PC and NPC KOS. You are given a mysterious letter to get s cure but do you want to lose your sudden new power?
Legendary items of lore that only activate under certain circumstances and return to their origin. Like say for the sword and the stone that randomly successfully pulled but returns after 3 months.
There should also be legendary items for PvP. Like think infinity stones but you become killable and the stones are lootable. The more you collect the stronger you get but also the bigger target you are. Think it would create some fun chaos.
I think it's dreadfully boring to have +5 item being considered legendary in games now a days.