Sailor.. I can't help but laugh every time I see these threads with you talking to yourself xD
It could work.. but I think there are better options available and an Inquisitor, at least to me always works better in a Squad since he can grab Divination and such.
However if we are running him by himself I think a little more than Terminator Armour and a Hammer are necessary, sure he can get to S8 but he's still only one model. Also, I think if you have him in Reserve, rather than Deep Strike you can just have him walk on to the board from your table edge.. (If I recall correctly). The question is what more is there? I would ALWAYS choose a Daemonblade over a Hammer.. heck even if I gave him a Hammer i'd take the Daemonblade.. Why? Because the boons can potentially port over to your Hammer! For example +3 Attacks, Rage and Furious Charge, Feel No Pain and Eternal Warrior and even the possibility to generate extra Warp Charge.
Now the rest of the powers mostly go on the Daemonblade itself, but you get to roll twice on that table and I think it is just wonderful. The Hammer really being back up just in case you need something to take on heavier targets..
That's how i'll run mine anyway^^