That's because the "on hit" is an indicator of the total damage dealt. It's a description. For the prismatic blade, you have numerous damage types plus an additional number of d8 custom scripted. The total effective number of d8 damage (from all forms) is 25d8. Given the wide variety of damage types, it will likely do some damage against just about everything. That also means you won't do nearly as well as a single damage type weapon against monsters susceptible to that type of damage.
The two best weapons in the module are the Ancient Sword and the Sword of the Spirit. I'd say the Sword of the Spirit is slightly more effective, but only lawful good paladins can equip it.