A 20th level Totemist puts the Incarnate to shame in the damage department, but lacks the versatility (in terms of being able to shift from Combat Guy to Skill Monkey within one encounter, as the Incarnate has more Skill Booster soulmelds than the Totemist does).
I would actually argue that the totemist doesn't have any skill-boosting soulmelds. All of their skill boosts are competence bonuses, and hence don't stack with the cheap magic items that anyone interested in skills should have anyway. Incarnates, by contrast, get mostly insight bonuses, which are significantly harder to come by from other sources and hence significantly more valuable.

As for getting a +5 weapon (or eventually +6 or +7), this is true, but all you can get is the enhancement bonuses, not any of the other weapon modifiers. By my figuring, an Incarnate has to be 12th level to get a +5 weapon (3 base essentia capacity from character level, +1 from Expanded Soulmeld Capacity feat, +1 from the 3rd-level class feature), and by that point, a standard fighter can afford a +3 or +4-equivalent weapon (say, +1 freezing flaming shock) and get a party member to cast Greater Magic Weapon on it, for a +5 or +6-equivalent total.