Even if these thing might not qualify as evidence in the court, it could still help Hank's ongoing investigation
If it did not help a court prosecution (i.e. being inadmissible evidence), the DEA would not have allowed Hank to investigate.
Note that when he was going after Fring he had to keep most of his investigation secret from the DEA itself. It was only when he had what he felt was a range of suspicious evidence (most of which was either admissible evidence or could be obtained as such after a more official investigation), that he approached ASAC Merkert and Steve Gomez, hoping to get an official 'green light' to investigate. That 'quiet poking around' would have been a lot harder to do with a chunk of compressed scrap metal that Walt, Jesse and the junk yard owner all knew was both oozing with evidence and known to the authorities.
Did crushing the “crystal ship” really destroy all the evidence?
It would not have removed chemical residues, and if some of the parts were prized apart and relatively whole (e.g. a panel that was squeezed down flat, as opposed to a steering wheel that was fractured into many parts) it should still be possible to lift prints.
If the DEA or Hank had gone through the block for fingerprints, they might have been able to place Walt at the scene (who they'd never expected) as well as Jesse.
But then, as you suggested in the question, it was not admissible evidence. Notice how it stopped Hank dead in his tracks when the junk yard owner, and Jesse, started to challenge the legality of what Hank was doing. He was arguing with them, but not rushing head-long towards wrenching that door open with a tool from his car. He realized that unless he got admissible evidence, all his efforts were wasted.
When the junk yard owner claimed it would remove all evidence, I presumed he meant when the material was melted down to form lawn furniture.
