While we do not know the exact recipe for Damascus steel, I feel with our current technology we have most likely surpassed that original quality of Damascus.
From Wikipedia - http://en.wikipedia.org/wiki/Damascus_steel

Damascus steel is a hot-forged steel used in Middle Eastern swordmaking from about 1100 to 1700 AD. Damascus swords were of legendary sharpness and strength, and were apocryphally claimed to be able to cut through lesser quality European swords and even rock. The technique used to create original Damascus steel is now a matter of historical conjecture. Many raw materials, and the metalsmiths' recipes, are no longer available

For reasons that are not entirely clear, but possibly because sources of ores containing trace amounts of tungsten and/or vanadium needed for its production were depleted, the process was lost to the middle-eastern metalsmiths circa 1750AD. It has been eagerly sought by many since that time.

From the very start, the superior capabilities of Damascus swords attracted significant attention, and many attempts were made to reproduce either the performance or the appearance of the Damascus blades. Since pattern welding was a widespread technique, and produced surface patterns similar to those found on Damascus blades, many people believed that Damascus blades were made using a pattern welding technique. This belief was challenged in the 1990s when J. D. Verhoeven and A. H. Pendray published an article on their experiments on reproducing the elemental, structural, and visual characteristics of Damascus steel.

Verhoeven and Pendray started with a cake of steel that matched the properties of the original wootz steel from India, which also matched a number of original Damascus swords they had access to. The wootz was in a soft, annealed state, with a large grain structure, and many beads of pure iron carbide which were the result of the hypereutectoid state of the wootz. They had already determined that the grains on the surface of the steel were grains of iron carbide, so their question was how to reproduce the fine iron carbide patterns they saw in the Damascus blades from the large grains in the wootz.

Although such material could be worked at low temperatures to produce the striated Damascene pattern of intermixed ferrite and cementite bands (in a manner identical to pattern-welded Damascus steel), any heat treatment sufficient to dissolve the carbides would destroy the pattern permanently. However, Verhoeven and Pendray discovered that in samples of true Damascus steel the Damascene pattern could be recovered by aging at a moderate temperature. Their investigations found that certain carbide forming elements (chief of which was Vanadium), which in the wootz were concentrated in the carbide regions and were formed into a striated pattern during forging just as the iron carbide itself, did not disperse until higher temperatures than those needed to dissolve the carbides. Therefore, though a high heat treatment could remove the visible evidence of patterning associated with carbides it did not remove the underlying patterning of the carbide forming elements, and a subsequent lower temperature heat treatment (at a temperature at which the carbides were again stable) could recover the identical structure by the binding of carbon by those elements.

From - http://www.tms.org/pubs/journals/JOM/9809/Verhoeven-9809.html ( a very good article)

Unfortunately, the technique of producing wootz Damascus steel blades is a lost art.

Debate has persisted in the metallurgy community over the past 200 years as to how these blades were made and why the surface pattern appeared.6-8 Research efforts over the years have claimed the discovery of methods to reproduce wootz Damascus steel blades,9-12 but all of these methods suffer from the same problem--modern bladesmiths have been unable to use the methods to reproduce the blades. The successful reproduction of wootz Damascus blades requires that blades be produced that match the chemical composition, possess the characteristic damascene surface pattern, and possess the same internal microstructure that causes the surface pattern.

The discovery that vanadium is extremely effective in producing Fe3C banding in high-carbon steels17 was aided by the accidental use of Sorel metal as a raw material for making the small ingots. Sorel metal is a high-purity Fe-C alloy, containing 3.9-4.7% C, marketed by Rio Tinto Iron and Titanium America, Chicago. The alloy is produced from a large ilmenite ore deposit at Lac Tio on the north shore of the St. Lawrence River. Analyses of several batches of the Sorel metal has found that it consistently contains a few hundred ppmw of vanadium impurity. Apparently, the impurity is contained in the ilmenite ore. This suggests the possibility that the low levels of vanadium found in the genuine wootz blades of Table III may have resulted from ore deposits in India where the wootz steels were produced.
One of the big mysteries of wootz Damascus steel has been why the art of making these blades was lost. The vanadium levels provide the basis for a theory. Based on our studies, it is clear that to produce the damascene patterns of a museum-quality wootz Damascus blade the smith would have to fulfill at least three requirements. First, the wootz ingot would have to have come from an ore deposit that provided significant levels of certain trace elements, notably, Cr, Mo, Nb, Mn, or V. This idea is consistent with the theory of some authors30 who believe the blades with good patterns were only produced from wootz ingots made in southern India, apparently around Hyderabad. Second, the data of Table IV confirm previous knowledge that wootz Damascus blades with good patterns are characterized by a high phosphorus level. This means that the ingots of these blades would be severely hot short, which explains why Breant's9 19th century smiths in Paris could not forge wootz ingots. Therefore, as previously shown,15 successful forging would require the development of heat-treating techniques that decarburized the surface in order to produce a ductile surface rim adequate to contain the hot-short interior regions. Third, a smith who developed a heat-treatment technique that allowed the hot-short ingots to be forged might still not have learned how to produce the surface patterns, because they do not appear until the surface decarb region is ground off the blades; this grinding process is not a simple matter.

The smiths that produced the high-quality blades would most likely have kept the process for making these blades a closely guarded secret to be passed on only to their apprentices. The smiths would be able to teach the apprentices the second and third points listed, but point one is something they would not have known. There is no difference in physical appearance between an ingot with the proper minor elements present and one without. Suppose that during several generations all of the ingots from India were coming from an ore body with the proper amount of minor elements present, and blades with good patterns were being produced. Then, after a few centuries, the ore source may have been exhausted or become inaccessible to the smithing community; therefore, the technique no longer worked. With time, the smiths who knew about the technique died out without passing it on to their apprentices (since it no longer worked), so even if a similar source was later found, the knowledge was no longer around to exploit it. The possible validity of this theory could be examined if data were available on the level of carbide-forming elements in the various ore deposits in India used to produce wootz steel.

While we are just now understanding the what made Damascus steel so legendary, we do not yet understand exactly how what the recipe was.