Well his W passive is a part of it because of Guinsoo's. So the proc let's on hit effects proc twice right? So you are pretty much creating damage out of thin air. And yeah Wit's end is roughly similar in overall damage output when just looking at that on hit damage, but Guinsoo's stats also scale better than what is on Wit's End. The deal with on hit builds is that they typically scale pretty well, but they turn on faster. The one item power spike for a Kog or a Varus is better than the one item spike on say a Tristana or a Jinx.
**So to simplify it, what makes a character good with on hit is their ability to abuse the Guinsoo's bonus proc, and abusing attack speed. **
Now with Varus the issue is also that prioritizing attack speed early on just works well with his kit. Stacking up his passive gives him even MORE attack speed; so if you go Guinsoo's into Zerker Greaves and Hurricane, all of the sudden you are able get close to attack speed cap with just two items after you stack up the passive. His W also adds those charges so the faster you stack it up so you can pop it with a spell the better. Again this plays into the earlier spike than most auto-attacking builds have.
Think about the interaction. You've got an auto attacking ADC, which typically don't turn on until like three items. But then they build this really well rounded item in Guinsoo's that has both damage and attack speed, making it a good one item spike. Then you add in his W stacks being popped with spells, and somehow this auto attacking ADC also has good mid game burst because he can stack up and pop you so fast. Guinsoo's is also better than Wit's End as an early buy because in addition to the on hit damage, your abilities scale off the damage so it actually helps with his poke and wave clear.
To understand Varus specifically understand this: He scales decently with the on hit build and that build also allows him some coverage in the early and mid game, while stuff like Kog'Maw have a pretty big dip after the initial Guinsoo's buy. Think of him kind of like Ashe used to be. Scales pretty well, although not a hyper carry, like second tier. Has a kit that provides something else in the mid-early game to make up for it. For Ashe it's vision-CC-Poke, while for Varus it's poke-burst-and some CC.
It's just a well-rounded, safe build/pick. His kit is so well-rounded in fact that I'd say if he was literally 1% stronger he's OP.