Some of the best Japanese style swords have been made from anything from forge welded cables to Russian anchor iron. It's how the steel is recycled and retreated for the sword. Toughness has to do with impact absorption and shock tolerance, while hardness has to do with cutting and edge-holding capability. Too soft, and your sword gets cut into. Too hard and the sword is too brittle.
Poor heat treating can totally ruin a sword.
It's amazing how some businesses or websites boast about the quality of the steel but speak very little about how a sword was heat treated. If you don't heat treat it right, initially, it might not survive the final water quench and end up crack. Some cracks are very obvoius, and some are very fine. The fine ones can grow larger over time in some cases. Even if some have a good concept of the first two points, some sword makers don't have any concept with how a sword should feel.