Luke Skywalker should've handed Rey his green lightsaber on Ahch-To in Star Wars movies, bringing the Skywalker saga to a close with Palpatine and the Sith defeated once again and the future wide open for the galaxy's new hero, Rey Skywalker (Daisy Ridley).
As well as continuing the development of the new characters in Disney's Leia did indeed train as a Jedi under Luke, but gave it up because she sensed it would lead Ben Solo to the dark side.
After Luke recounted this to Rey on Ahch-To, he retrieved Leia's blue lightsaber, which was apparently hidden in his hut, and gave it to her, saying that Leia would've wanted her to have it. The moment made some sense, at least insofar as Leia did help train Rey, but it didn't fully resonate, perhaps in part because the idea of Luke having Leia's lightsaber in his hut after exiling himself seems a bit off. That he held on to this weapon while leaving everything else behind, shutting himself off even when his sister was in dire need of him, is among the many decisions in The Rise of Skywalker that don't really work within the narrative, but Luke having his green lightsaber - and giving it to Rey - would've made more sense.
It's more likely that Luke would have his green lightsaber with him on Ahch-To. After all, he definitely had the weapon when Ben Solo destroyed the Jedi Temple, which means he likely had it when choosing to exile himself. Although he was leaving the Jedi behind, it's more likely the kind of thing he'd likely take with him, just incase. This is even hinted at in the novelization of The Last Jedi, where a reference is made to Luke's "weapon", seemingly suggesting that the green lightsaber is indeed on the island with him. Luke might've needed the weapon for his journey, or simply as a stark reminder of his failings; either way, it fits more that he'd have it than keeping a hold of Leia's lightsaber.
Beyond just that, though, it'd also fit more thematically if Luke gave Rey his green lightsaber, because it could end up being used by Ben Solo. As revealed in The Last Jedi, it was that which cemented the turn of Ben into Kylo Ren. With Kylo Ren's redemption being solidified when he s the fight on Exegol, it would've been an even more powerful moment for him to wield Luke's green lightsaber, showing just how he's found a way to forgive his uncle for what happened and make it back to the light side. That means his using the lightsaber still carries the significance of him returning to his family roots, but gets a deeper meaning too, while it also means that Rey keeps the Skywalker lightsaber throughout the fight. Given how her story ends, then that's even more fitting still, while the contrasting blade colours would've stood out even more in the final battle against Palpatine.
By including Luke's green lightsaber in The Rise of Skywalker, the movie would've been able to tick a lot of different boxes. It would've tapped into the sense of nostalgia the film aims for, providing an echo of Return of the Jedi and a dose of fan-service, but crucially in a way that felt earned and fitting with both the story and themes of the franchise. It would've fit with Luke's story, as him recovering the weapon that led to him exile himself and leave the Jedi behind would cement his return to the Force, even in death.
It'd give greater weight to Ben Solo's redemption, and fit in with Rey's ending too. Given her yellow lightsaber can be seen to show both blue and green when she ignites it, then this would lend even further weight to the theory that she used the crystals from the two Skywalker sabers to make it, and mean her new lightsaber color had more meaning too. It wouldn't take anything away from Leia's story in Star Wars: The Rise of Skywalker either, since you could still have her training as a Jedi in the same way, so no impact would be lost there, and it'd finally, fully solve the mystery of just what happened to the green lightsaber too.
