I'm not really in favor of damage values being based off of the detailed physical properties of metals such a density, tensile strength and the like. Its terribly complex and makes it hard for players to know whats going on or how good/bad their weapons actually are.
In a way, that might be a good thing. It'll force people to view metals qualitatively instead of just thinking "Oh, this metal has a bigger number than that metal" -- you know, the powergaming mentality. Maybe it's just me but I find purely quantitative comparisons pretty boring.
Impaler has a good point anyway..it would be unnecessary if weapon damage -for example- would be based on so many stuff...that is just way too complex. Either way it doesn't really matters. Steel will be always very good in the vanilla game.
However from the modding perspective, a more complex material->damage system would be good to have.
If we only needed to determine weapon damage, true. But tensile strength will come into play with construction, we'll obviously need weight/material density too, malleability will have its uses in smelting, forging, trampling, etc.. It'l probably be easier to base everything off a few core properties, rather than starting from a blank slate for every stat.
And as a bonus, using real life values for those properties will make sure the game is fairly well-balanced from the start, the material properties will be intuitive, it'll be all the more awesome if you can compare adamantium with ordinary iron as you know it, and last but not least: there'll be no endless unproductive discussions about which arbitrary value is better, because there's only one reality.