Kasenit will give a very thin case of high hardness. Sharpening the knife would very quickly cut through to the soft steel underneath, which would ruin the edge.
Old files are a common source of blade stock for homemade knives. I've heard that some modern files are made using methods than don't lend themselves to good blades, but the few files I've used for blades have worked out fine. Mystery steel is always a bit of a risk, though.