3% of 1000 mana, what the item gives, is .03x1000=30.
And it deals double that in damage or 60: .06 * 1000 = 60. It drains 3% of your Current Mana to deal 6% of your Current Mana (or double the mana drained) in Magic damage. This means you deal 6% of your CurrentMana and -3% Damage per hit. Hence my original numbers of 1000 Mana being 60 Damage on hit.
And, again, that ignores base Mana. Realistically speaking, this means you have closer to 2000 Mana to work with or 120 Damage on hit at a 3% loss per attack. If we want to look at it from a cost analysis, you need to get 100 total damage from this to compare it favorably to, say, BT. At 2000 total Mana, this means you have 20 AD (base) + 40 AD (Awe) so you only need Muramana's toggle to add 40 Damage ... which occurs at ~667 Mana. At any point above that, Muramana's total added damage is better than a BT.
Of course, we have some situations where it's not quite as cut and dry as that: Armor Penetration doesn't benefit Muramana. For non single-target skills, Muramana doesn't benefit them. Muramana has no synergy with Crit Chance.
What Muramana does do is it scales well with champs with single-target skills or low AD scaling on their skills. In those situations, it generally adds more damage per hit than most other options (e.g., BT) would assuming you can stay above 33% of your Mana pool. Which you probably will. It lacks the multiplicative scaling with Crit but it does scale with Attack Speed. If there is some build that perfectly synergizes with Muramana, it'll end up being some Muramana+ASPD build or a Muramana+Tank build.
Cooldown on W is too long to sit back and effectively farm on someone like Kha'Zix. To farm you need to be aggressive and push them away from the front line. Manamune doesn't really let you do this because people can 1v1 you and push you out no problem. Most hard bruisers like Olaf or Irelia also have sustain, and won't be harassed down.
I never said anything about farming with just W. More of being able to always use his W when it is up. That means every 8s to be able to spend 60/70/80/90/100 Mana. Kha'zix in lane can already do a decent enough damage fast enough with an Auto+Passive+Isolated Q that he can actually keep someone at bay with constant Ws once they're harassed down to 50-60%.
Like I said, though, Manamune isn't enough for that. And, even if it was, you'd still have to do enough damage to get into position to bully a lane with W and relying on W like that isn't his strong point anyway.
It drain 30 mana, but does 60 damage, that doesn't include the champion's built in mana. Then again, you're post reminded me that it count your "current mana", so the damage will scale down as you cast spell/auto attack. 60 damage is still pretty good, if you compare it with wit's end, plus the bonus attack damage.
It used to be higher (4%/8%) but Ryze's burst combo got something like 500 bonus damage out of it. Now it's "only" around 350 for him.
If you average it out from full to zero, it still comes down to adding about 60 Damage on average (you tend to have 1000 Mana, or close enough, by level 18) per hit. That still makes it a better auto-attack damage value than, say Bloodthirster. Of course, it's at the cost of the sustain but that still leaves the option for, say, BotRK as your second damage item in a Muramana build.
If not for the absurd expense it would be to get it all, I'd love an ASPD Irelia build with Muramana + BotRK just to be hilarious with. Nidalee too, potentially.