Even striking vertically, the extra effort involved in throwing the hammer down, is more than repaid by the extra kinetic energy it gives.
The objective is to get the maximimum work from the minimum effort. The maximum work is achieved by moving the hammer as fast as possible.
It requires practice to balance just how much energy you are going to use to 'throw' the hammer and still be able to keep working all day long, day after day.
It also depends just what you are doing with the hammer and how big it is. Some jobs need a light blow and you would use say a seven pounder. In really extreme cases you could use a 'Mundy' hammer which weighs 28 pounds. Although you couldn't swing that puppy all day, It's most common use is for heavy 'dead' blows. With a dead blow you hold both hands still on the shaft and don't get nearly as much power but more direction and control.
A good hammer man can get as much from a seven pounder as a tyro might from a fourteen pounder.