That could work. It reminds me of an anime I read about where the high schoolers... (what is it with Japan and high school?) had pieces of jewellery that made them reincarnations of ancient personalities from the Sengoku period.

Yours sounds more interesting.

I would go so far as to say [u]most[/u] of those in the war fell. That way you can have some specific uber powerful NPCs to contend with that are still pissed at the spirits inside the artifacts. (Perhaps these are the weapons that those people wielded?) Secondly, maybe it was just the special mystically endowed heroes. After all, who cares about the lowly unpowered soldier and the powers he doesn't have to grant you anyways? Maybe there was a weapon of mass destruction used by a third party that killed all the heroes and villains in that last final battle alike and thrust their "souls" into their weapons and/or equipment.