From Diablo Wiki
Black weapons or black damage refers to weapons in Diablo 3 that do not have any sort of elemental damage. Since all the elements are color-coded (fire damage is red, poison damage is green, etc), these weapons without any elemental type are termed "black." Skills that deal elemental damage will still display normally, even with a black weapon, as the skill graphic generally overrides the inherent weapon graphic.
The reason these weapons matter is due to a bug in how Diablo 3 calculates their damage in conjunction with other items that add elemental damage. Black weapons get a bonus in their total damage when used with items that add +% elemental damage.
The Bug Explained
The problem was well explained by a reader in comments on a news post about the matter:
Black weapons are the best type of weapons to have when if you have other items that grant additional % elemental damage. For instance:
- Zunimassa's Trail (db) boots with 7% poison damage
- Tal Rasha's Allegiance (db) (7% elemental damage)
- Triumvirate (db) (5%/5%/5% cold/fire/lightning damage)
The bug exists because the extra % added damage is calculated from the non-elemental damage on your weapon. So if you have a black weapon that has 100 physical (black) damage then Tal Rasha’s would give you 7% of 100 the full 100. But if your weapon was 100 damage (25 physical/75 elemental) then Tal Rasha's 7% bonus would only calculate on the 25 physical/black damage.
Fixing the Bug
In early 2013 Blizzard announced that they would not be fixing this bug on existing items since they did not want to nerf existing gear.
- The bug is fixed on the Diablo 3 console, and will be fixed in items that drop in the future. Loot 2.0 and the better quality gear in Reaper of Souls will not have the bug either, thus "fixing" the bug by dropping higher quality gear that players will replace their current black weapons with.
Wyatt Cheng confirmed this plan in a forum post in October 2013. 
Bug First Reported
The bug first came to light in early September 2012, when a fan posted the issue and got some Blue CM replies. 
So it turns out that any item that says that it "adds +x% to elemental damage" actually works by multiplying your non-elemental ("black") weapon damage by 1.0X (so if you have +6% to poision, and you have a weapon with average 950 regular damage, you will get 106% times 950 = (950 regular + 57 poison) damage as your base weapon damage. Basically, if your weapon is all non-elemental damage, you will receive a +6% damage increase as poison damage.
MANY players are very curious as to whether this is how the modification is actuallly supposed to work. Because it is in fact, counter-intuitive for it to function in this way when its wording suggests that it should increase the amount of base poison damage by 6%, instead of adding a flat percent increase to your non-existant poison damage.
I want to know if this is going to be changed or if it is going to continue to function like this indefinitely, because if it is supposed to be this way, things like zunimassa's boots and triumvirate (otherwise mediocre items) are the absolute best-in-slot items for certain classes.
Blue please enlighten us!!
The "+x% Elemental Damage" affix works by adding "x%" of your physical damage to your attack, in the form of the damage type listed.
So, really basic example:
- Your physical damage is 100, and the item adds +3% Fire damage.
- You gain 3 extra damage to your attacks as Fire damage.
Things this takes into account:
- Rings, mojos, orbs (etc) that have an "X-Y" damage affix (e.g. "1-2 Damage")
- The base damage range of your weapon, before any elemental damage is added from the affix
- +Min or +Max affixes on weapons
(Note: It doesn't benefit from "+X-Y Elemental Damage" affixes on weapons.)
We realize the current wording for this affix can be confusing, and it's something we'd like to make more clear in the future. If you have any suggestions for how this affix could be better worded, we're definitely interested in your suggestions. Just keep in mind that space is limited in item tooltips, and that whatever we use would need to be translated into all of our supported languages.
The issue rested there for some months, until January 2013 when a mention of the black weapons bug showed up pre-release in the notes for Patch 1.0.7. Fans freaked out, wondering if black weapons were going to be nerfed/fixed in a way that would affect existing items. Blizzard quickly replied that no, any chances/fixes would only impact future items and existing gear would remain buggy, for better or worse.
Known Issues are just that, bugs that we know about. They are NOT necessarily bugs that are going to be fixed. The MinMaxDamage bug has been a bug known to us since July of last year, however, we did not want to fix a bug that would effectively nerf a large number of existing weapons. That’s why we did not fix the bug in any previous patch that we’ve released since the bug was found, nor are we fixing it in patch 1.0.7. Currently, the plan is that at such at time that we address the bug, the bug fix will only apply to newly created items, so as to not adversely affect existing items.
I’m still curious though, in the hypothetical scenario that this bug is fixed, will it be a buff or a nerf? I think the theorycrafting folk would really appreciate clarification on what the expected proper behavior of the minmaxdam affix is.