Not sure about the steam tank as it just got a TON of erata and FAQ's recently, but I am fairly sure it will kill some monsters and dragons.
I know it is best used against multi wound models. Before 8th Edition came out, it was stated in the last lizardmen FAQ (I think) that any model wounded by the blade of realities that did not have a Ld value, was destroyed immediately. Now, that reference was in relation to the doom wheel for skaven, I think. But it should apply here as well. unless the Empire FAQ changed that.
Well, the rules for the weapon simply state that if you score a hit, the model must pass a Leadership test or they get removed from the tabletop. The only mention the Blade of Realities has in the FAQ's is talking about whether a similar effect (a leadership penalty from a spell) would assist. The answer was no. Therefore, I'd conclude that you can't affect the outcome of the Leadership test either way. You just roll to hit, if you score a hit they take a normal Leadership test on their own Leadership, and if they fail they die with no saves of any kind.
I have seen it written somewhere that a model without a Ld on that test auto fails the Ld test and dies. It was in reference to the skaven doom wheel, I believe. It could work that way because the doomwheel has no seperate model driving it (the rat is built into the wheel). With the steam tank, if you hit the tank, it has no Ld value, so it fails. Unless you test against the engineer.
it was intitially a great weaon against the furnace and the bell since it affects the model based on the models leadership therefore insta kill
Unfortunately it can't kill the steam tank, as the steam tank passes all characteristic tests automatically except for initiative. That steam tank is pretty danged invulnerable. Although with enough attacks put on it, you can eventually wear it down. My best solution would be to ram some skrox into it, and grind away unit you can get a few wounds past the armor save. It will have a harder time defending itself as combat wears on, as it becomes more dangerous for it to generate steam points.
I don't see anything in the 8th edition BRB to stop us from just poisoning the stank with our skinks the same way we handle most big things.
Just the 1+ Armor Save. With having to poison and beat that Armor, it will take a lot of shots to bring it down. But that may still be the best option.
Might be a little bit easier if you buff up the skinks with some strenght spells, an you are using javelins....