Nashor's Tooth, Hextech Gunblade, Lich's Bane, the magic autoattack damage from masteries... all of these different small places that magic damage can come from but spell vamp doesn't work with. It wouldn't make a huge impact, but it would definitely help to bump spell vamp up a bit, since right now it's not a viable pick for most champions.
Well - it works on most of the Spells in the game currently, hence spell-vamp. True damage, physical damage, magical damage - Spell Vamp, Liandry's, and Crystal Scepter are divided in an ability/auto-attack split, not a physical magic damage split.
You can spell vamp with Riven's physical damage Broken Wings, her Wind Slash, Darius's Guillotine, Cho'Gath's Feast, Smite on minions. Spell vamp isn't a "magic damage" sustain stat, it's just a Spell sustain stat.
Life steal also isn't physical damage - it won't apply on physical damage spells like Broken Wings, Taste their Fear, or Judgement. It doesn't apply on physical damage on-hit effects like the HP shred of Kingblade either. It does actually apply on Poppy's magic-damage Crushing Blow and Warwick's Infinite Duress as well, making it more just an "auto-attack" deal than physical damage.
On-hit effects like Wit's End, Kingblade, Feral Flare, Toxic Shot, and so on are ususally the only things both spell vamp and life steal don't effect.
So adding on-hit magic damage to the mix would be thematically odd. Not that spell vamp and life steal aren't a little weird to begin with, but you're making them weirder with such a change.
I don't know about you, but I wouldn't want to give a champ like Vlad more sustain in lane with absolutely no change to him or his build...
If Vlad is the only problem, he can get a very minor nerf to his Q.
