Why is this sword more valuable than an objectively better weapon?
Less damage, less armor piercing effect (left) - but why does the better steel sword (right) have less value?
Solution 1:
The short answer is: rarity.
Witcher weapons and armour are rare and very few, if any, blacksmiths know how to craft them. In universe supply and demand means that the value of Witcher equipment is higher than common equipment such as the other sword you have used for comparison, even if the other equipment is better.