There are two factors involved on the masamune. The first, is its made of dreamstone, which is an effective conduit of energy, and not just Lavos' energy. Take the Mammon Machine, when you fight it during the Zeal boss sequence, it alters and changes all forms of energy that effect it, not just Lavos'. As one example, it turns magical energy into attack power. I think the machine was originally created to act as an amplifier based on the elemental/planetary energies that Zeal utilized prior to drawing upon Lavos' energy, and then was later discovery to be able to work on Lavos energies, which Zeal perceived to be greater, and was thus corrupted by it.
The second factor on the sword is Frog. Between his determination and focus on defeating Magus, and also his superior swordsmanship to cyrus (i think in reference to both physically and mentally) he his able to draw upon the energies Magus uses as a defense. This in turn 'breaks', changes and I'd say eventually destroys the barriers Magus creates.
Another factor could be the relation between dreamstone and Lavos. Zeal grew to draw power from and on Lavos, so I'd say much of Magus' original powers were drawn from Lavos, which is part of why his attacks didn't have any effect. Melchoir created the 'red dagger' to stop/counter the Mammon Machine, so dreamstone, which I think is a manifestation or creation of the world/entity, is created to fight against Lavos. The masamune then, cuts into the power that Magus is drawing from Lavos.
As to the corruption of the masamune, i'd say that's twofold as well. One aspect are the deads of its users (dark and murderous) and the whole "not cleaning' your blade corruption. Another aspect could be from Lavos + Schala/TD. Masa and mune are dream creatures, and could be effected by 'dream energies'. Queen Zeal's dying words described Lavos as being in a nightmare, or in other words, a corrupted dream. Between not having an owner to channel positive energies into the masamune, how its used, and effects from Lavos/TD in the form of nightmares could all combine into its corruption. Again, back to the Mammon Machine. It could be perceived as being corrupted too; corrupted by the greed and ambitions of Queen Zeal into drawing more power, and then compounded by Lavos.
edit: Forgot to comment on the part involving Magus using the masamune. >.> Effectively yes, I'd say he could use the masamune, potentially even as an amplifier, or boost to his magical prowess. Self duel tech perhaps? However, I think there are other factors that would also reduce its effectiveness in Magus' hands. One being that he probably hates the thing. Its not necessarily a bane to him, especially not if he were to wield it, but as a symbol itself. It can remind Magus of being to weak to beat Lavos himself (as its a creation of Zeal, and also a tool of Frog) Two, in regards to defeating Lavos, Magus probably doesn't possess the focus, training and mindset to utilize the masamune beyond what Frog can do with it. I'd think a large part of this being that the masamune is a sword, and intentionally so. On one hand, I think that in CC, how the mastermune is formed is pretty weak, but on the otherhand, its also possible Serge needed it, or at least the properties of dreamstone, to beat the TD.
On the otherhand, perhaps after CT, Magus is why the masamune is corrupted. Perhaps he tried to use it to help him rescue/find Schala, and the nature of his dark powers, (he is the demon king afterall) corrupted it.
