I'm uncertain about 3.5 but that's because I look at online resources (that might have been errataed), but normal-sized octopi in 3.5 just have one generic "arms" attack for one strike. (Giant octopi might have 8 attacks, but this is a little one that's been enlarged).
However, 3ed had small octopi with 8 attacks https://www.dandwiki.com/wiki/3e_SRD:Octopus
Adding daggers to that should be ok, I'm sure.
Mostly I think daggers were added because they (and natural weapons, and little else) can be used while grappling, and the big deal here was apparently just to get saving throws against poison into play.