"Pip" is an artificial homunculus controlled via the the player's mind.Merlin could create a being capable of sword and sorcery; even one that can bond with a copy of Excalibur; sure. However, the problem with homunculi is that they're difficult to maintain; especially mentally. Specifically,
- It's difficult to have a stable personality at all; and not result in a Golem situation where they just try to kill everyone.
- Constructed personalities break down; especially if you tell them you can only keep them alive for a limited time.
- They tend to want the same rights as regular human beings.
- Supported by the fact that apparently Merlin was experimenting with Pip's body with reanimation in between books 4 and 5.
- The personality he got wasn't actually an individual person; it was a gestalt of everyone who read the Net Spell. Brennan's Dracula's Castle Choose Your Own Adventure comments that hundreds of children in England have been telling their parents of how their minds were taken back in time.