I don't know about bastard swords, because nothing was changed there, so they should not be any more common than before, but I will look into rarity of magical items. I tried to make them all more rare to account for their higher numbers, but they could definitely be made more rare still.
BTW, a radical idea - what if we prevented most magical weapons and armor from spawning in UT? This way we could have a nice change of pace from lowly crawl through tunnels to mroe exciting adventure in caves/tomb.
Item generation might need to be revamped. IIRC (and please correct me if I'm wrong), each time the game generates an item anywhere, it rolls a random number and picks from the full list of spawn-able items. We can control how often a given item spawns by weighting it, sure, but you are no more or less likely to walk into a room containing a +5 flaming adamant sword in UT1 than you are in GC6. (Not accounting for monster influence, i.e. a kobold walking off with said sword or Rondol spawning with his diamond spear.)
IIRC the game picks from whole list of items based on their rarity, with some items being allowed to generate in only certain dungeons (eg. food cannot be generated in TX). You are no more or less likely to find a flaming sword in TU1 or GC6, but the +5 is much, much more likely in GC6, because enchantment chances are also weighted in favour of deeper dungeon levels. Those +5 swords on UT3 mentioned in other thread are very unlikely (but possible), while +5 swords in Oree's Lair are quite normal.
But yes, there is always a chance of random great item being generated. And given how random the generation is, there can be funny situation like the one game I found four Saal'thul, the first one in UT and the rest in GC (including one in Merka's shop).