I won't speak on the Japanese or other ancient swords here but I will mention a few things that are relevant to your questions using modern known steels.
Basically, hamon formation is most easily achieved on lower alloy, shallow hardening simple carbon steels. Low manganese levels specifically play an important role in getting the most out of hamon. Other elements that aid in hardenability such as chromium can hinder hamon formation as well. That is why simple, low alloy steels work better for this.
If hamon formation is your goal, the ideal steels are (more or less in this order IMO) w2, LOW MANGANESE 1075, w1, 1095 and maybe 1084 (though 1084 usually has too much manganese to get a bunch of fine activity).
These steels, hamon formation specifically, tend to work well with simpler tools and methods and are somewhat more forgiving in heat treating with the caveat that if good hamon activity(and overall blade performance) is your main goal, good heat control is critical.
If I understood Ed's post clearly, I would disagree that achieving maximum hamon on the steels I mentioned meant that some blade performance had been sacrificed. If done correctly, the cutting edge isn't affected much (if at all) by the formation of hamon. There are plenty of blades with very active hamon by myself and some of my peers of w2, 1075, w1 and 1095 that I and many others consider high performance cutting tools.
I will add that I think hamon on knife blades, even big ones, as almost purely aesthetic and do very little to aid or hinder performance on todays blades.