A splitting wedge would make an extremely atrocious weapon. As has been mentioned before, they work well because you can get it stuck in whatever you're splitting, them drop it back down again. It would not work well at all for something that doesn't really "split" very cleanly or easily, like, say, a human, and it would be completely unnecessary and silly to penetrate armor with. The wedge is very wide-angle so penetration would suck, and to do much of anything at all you'd need to hit very square to the target. Plus, it would be heavy as hell.
There's one thing a lot of people don't consider when suggesting things like this: If it would work well, people almost certainly would have done it.
I'm afraid you're missing the point! It's not about a practical weapon, but rather being creative with what to do with a golden hammer!
Oh it's an absolutely atrocious weapon a'right; Instead of saying that it's "The Best Idea Ever, Why Didn't Middle Age Think Of This" it's simply the best thing I could come up with for a golden hammer
And the "heavy" aspect is rather irrelevant, when talking about our dear dwarves.
It would make a very messy impact if it split, though!
On a related topic, my girlfriend suggested a golden morning star or flail, with golden balls and steel spikes! The logic behind this is that the denser/heavier gold would increase the impact of the spikes, while the gold will not deform as much. ....man, now she wants to do this in D&D.
...This is starting to sound like something from Austin Powers