Ugh, don't you hate it when you feel like you're the only one that ever actually played 'that game'? Back in the late 90's, '98 I think, Interplay released a game called Die By the Sword, and an expansion Limb from Limb, that attempted to do exactly this. It was basically an early prototype so there were certainly some flaws, but they called the tech VSIM and which mapped your sword arm to the numbpad or mouse. Real physics were used, so to get maximum force on a swing you had to time your sword arm with player control to lunge forward and rotate/swing the hips. It didn't really capture pure sword combat as parrying/blocking wasn't implemented that well, so it was more about staying out of reach then lunging in with a well placed swing. A great deal of skill was required, which made it all the funner as you got better at it and could start hacking off limbs and decapitating all the usual fantasy critters such as orcs, kobalds, skeletons. Apart from a single expansion the game never went anywhere though.
As for this kickstart project, there's a couple of things I wanted to point out.
First, some people are way to focused on force feedback being a necessary requirement, which Yahtzee rants about whenever it comes up. Force feedback isn't going to mean a thing if there isn't a weight factor as well, because if you're simulating swinging an X kg/lbs claymore with an Y grams/ounce controller then there's something wrong there to start regardless of whether you get a clang/stop when you hit another sword. What you really need is to use the 3d models to train the user to match pace with their on screen avatar. This will reduce rapid flailing and gives you an opportunity to stop your motion when you're parried. Die by the Sword did this, rapidly moving the mouse around did absolutely nothing, you had to pace your movement with the character on screen to get the proper effect.
Then there's the comments that if you're interested in sword fighting you should just go join a club. While I fully agree, bringing this into a game isn't just about creating a sword fighting simulator, it's adding real sword fighting simulation/a degree of skill to existing games that let you explore large fantasy/medieval/historic worlds. When I venture out into Tamriel I want the option to be able to swing the sword strapped to my side with some actual skill, not just a matter of stat/level/gear numbers.
