I feel like dragon glass might be one of the ingredients in making Valyrian steel.
Remember that the Targaryans choose a bunch of islands filled with dragonglass for their "home" lands when they took over Westeros. And now that nobody remembers what it was good for nobody wants the islands (Stannis was super bitter his brother gave him the isles to rule instead of the Baratheon place).
Stannis did mention that his islands were full of dragonglass a few episodes ago.
Yea, this is what I think too.
Dragon Glass from what I can tell is Obsidian, which is made from volcanoes. My guess is when Valyerian Steel is made it's made using volcanic metal and maybe smelted using some type of lava or some shit.
Smelting obsidian with steel is fucking insanely hard and the art of doing it has been lost after the Doom, so any shot of smelting new steel is pretty much gone.
Now even though Valyerian Steel is most likely impossible to create now, Dragon Glass itself is going to be plentiful at Old Valyeria and Dragonstone.
I'm pretty sure that sword is with Tommen now. I highly doubt one of the last Valyerian blades is going to get buried with that fucking piece of shit king. Valyerian steel is almost always handed down.