What doesn't seem to have been taken into account is that a weapon made of a heavier material ought to be slower and more awkward to swing effectively.
Medieval war hammers and maces were historically useful against plate-armoured opponents, but there are good reasons why they were made of steel and not a denser material like lead. Beyond a certain weight they would have been too heavy to be useful as a weapon, even in the hands of a very strong wielder.
The current system also doesn't take account of the fact that a soft material like lead or gold would quickly be deformed by constant pounding on steel armour, even if it was breaking the opponent's bones at the same time.
Of course the real medieval warhammers were probably also shaped differently from the dwarven ones.
If I think of dwarven warhammers (especially if I think about the wounds they make) I think of a warhammer like the one used by one of the 2 weapon masters of Thulsa Doom in Conan 1.
I.e. a large hammerlike blunt object.
Most of the real medieval warhammers however would be rather shaped like picks (for example
Bec de corbins), often with a long shaft to be better able to swing the weapon.
Therefore I think, a real medieval warhammer would, in contrast to the warhammer in DF, be able not only to cause bruises and broken bones, but also (if the picklike head overcomes the armor) to cause broken tissues, severed arteries and bleeding.
These real medieval warhammers, if implemented this way by Toady would probably really get deadlier with Steel or Adamantine as their beaklike head would be better able to overcome the enemy armor if harder material is used.