> Just like modern steel would produce a katana infinitely better than folded crappy steel that the originals were trying to overcome
That's not an undisputed fact.
There has been a lot back and forth about the lost knowledge of previous generations and the romans supposedly used a superior cement which we can no longer replicate.
but to stay closer to your example: while the smelting of the metal has seen a lot of study, that doesn't mean that we're able to produce a superior katana.
You also need the smithing -- and need to figure out how the metal should be. That's of course possible, but hasn't really seen much study. So while we could theoretically produce an infinitely better katana -- thats not practical because of the money investment to figure out what that actually means.
Most enthusiast say that current katanas are at best on par with the old ones, often sub-par.