It seems to me more that there are three positions on this suggestion:
That the radioactive ore be smeltable (or whatever) to make uranium, and hence the risk of nuclear explosion.
That the radioactive ore be primarily a source of additional danger of some kind (from conventional radiation sickness, to a more fantastic source of Chaotic mutation, ala GW and ADOM), but also have potentially non-weapon uses (for example, as an additional metal that Nobles can request items of / dwarves having a fey mood can request as raw material, or as an ingredient for a very rare, expensive glass type).
That this is a very stupid suggestion which doesn't fit in the spirit of the game.
Needless to say, I am in the middle camp. I believe that the attention to detail already shown in the game design and variety clearly supports the inclusion of uranite (pitchblende) as rare ore, from which you can produce (highly toxic, and very dangerous) uranium metal for craft purposes, but mainly as a source of creeping death. I do not necessarily believe that nuclear explosions are a reasonable consequence, although the treatment of the significant heating produced by closely-stored masses of uranium might lead to /molten uranium/ flows, which would also be amusingly deadly.
I do not see how this fails to fit into a fantasy setting.