Djinn
and Tonic
One thing I have thought of is, since the master sword is created in this game, it might be that the master sword is the one made to copy this sword. If this guy is the original demon that was sealed away centuries earlier then his sword might have been around for a long period of time. When Link creates the master sword then it could be possible that the design of it was made to resemble an anti-version of this guy's sword. A good version made in a mockery of the very weapon that ravaged the old kingdom will now be used against the creature in an effort to save it.