Well, per the 3.5 rules, a "silver" weapon is one that has been alchemically treated/coated with silver in a process akin to gilding, rather than one made of solid silver. So logically the silver-gilded weapons are the ones the rules are talking about (and presumably a "silver" weapon like you're talking about is the same).
Still, I think the lack of a damage penalty on silver-gilded weapons the way they're implemented here is appropriate. It's such a pain for smiths to get to that point, especially now, to then yank back the advantage of earning that high smithing level is just weak. I can see that the damage bonus on a silver/steel greatsword is a bit crazy since it probably overcomes most weres' DR even without the gilding, but on the smaller weapons (rapier, shortsword) the bonus is far from overwhelming. Considering that by any reasonable standard the investment (in material, components and expended time) to produce a silver/steel weapon is far greater than what Murnu sells the equivalent silver weapon for, turning a silver/steel sword into effectively the same item (just with a silghtly lower weight) means that a smith at the pinnacle of his craft can never hope to compete
and recoup his losses. The PC-based economy for weapons and armor that everyone talks about can't happen if it's based on such an economically irrational system. (See, for instance, why most people give up on leatherworking once they can cure hides.)
ETA: And no, I don't think removing the silver weapons from the random loot is the proper solution