The way leeches work has been changed recently. It used to be that the percentage referred to the chance, per hit, that the weapon would leech. If it did leech, it would always leech the same amount. If it didn't leech on that hit, then there was no effect at all. Now, weapons leech on every single hit, and the percentage refers to the amount that is leeched.

Or to make it more clear...

Old system

A weapon with 40% life leech and a weapon with 20% would both give you the same amount of life when their leeching effect activated. But the weapon with 40% would activate twice as often as the one with 20%.

New system

Both the 40% and 20% weapons will leech on every single hit. But the one with 40% will give you twice as much life back as the 20% one.

When this new system was put in place, the 50% cap on leeches was dropped, since the property now means something much different than it used to.