Obsidian is very useful because the White Walkers cannot even touch it. Their body starts to steam and melt away on contact with Obsidian. So you don't have to smash them with Obsidian but just brining them in contact with White Walkers would cause serious damage.
Killing White Walkers with Obsidian
And then he was stumbling forward, falling more than running, really, closing his eyes and shoving the dagger blindly out before him with both hands. He heard a crack, like the sound ice makes when it breaks beneath a man’s foot, and then a screech so shrill and sharp that he went staggering backward with his hands over his muffled ears, and fell hard on his arse.
When he opened his eyes the Other’s armor was running down its legs in rivulets as pale blue blood hissed and steamed around the black dragonglass dagger in its throat. It reached down with two bone-white hands to pull out the knife, but where its fingers touched the obsidian they smoked.
Sam rolled onto his side, eyes wide as the Other shrank and puddled, dissolving away. In twenty heartbeats its flesh was gone, swirling away in a fine white mist. Beneath were bones like milkglass, pale and shiny, and they were melting too. Finally only the dragonglass dagger remained, wreathed in steam as if it were alive and sweating. Grenn bent to scoop it up and flung it down again at once. “Mother, that’s cold.”
“Obsidian.” Sam struggled to his knees. “Dragonglass, they call it. Dragonglass. Dragon glass.” He giggled, and cried, and doubled over to heave his courage out onto the snow.
A Storm of Swords
Obsidian is very powerful against White Walkers because it is a kind frozen fire.
The king gave that a curt nod, as if to say he knew and did not care. “You slew this creature with an obsidian dagger, I am told,” he said to Sam.
“Y-yes, Your Grace. Jon Snow gave it to me.”
“Dragonglass.” The red woman’s laugh was music. “Frozen fire, in the tongue of old Valyria. Small wonder it is anathema to these cold children of the Other.”
A Storm of Swords
Secondly Valyrian steel is very rare and expensive. Few houses have it and they don't share it with others. Valyrian steel can also be used for fighting normal humans.
