I found Rakinishu's blade at an event in act II, does it have any purpose, or is it just a sort of Easter egg / in joke?
2 Answers
It is used for an achievement and in the other hand it is Easter egg.
Achievement: "Bashanishu - Hurt Bashiok using Rakanishu’s Blade."
Rakanishu's blade is a easter egg from diablo 2 monster Rakanishu.
Bashiok is a monster created after an blizzard employee Bashiok.
There is no known use of it yet, other than earning the Bashinishu achievement.
For this achievement, simply hit Bashiok with Rakinishu's Blade.
There is a banner accent as a reward for this achievement.