Hmm, it may be something to do with attributes to that skill. RPG Makers phyiscal damage skill system works like this:
"Weapon" attributes which you select and create in the attributes tab mean that the player must have that attribute on them to perform the skill.
The character using the skill, must have in some way shape, or form a type of weapon, armor, trait or accessory which has the attribute of a skill you're going to use.
So for example, a skill named "Atom Slice" with the attributes Sword and Piercing.
This Short Sword has just the "Sword" attribute ticked in the box, but nothing else. I'm going to demonstrate how this works.
Lenni attempts to use Atom Slice with the Short Sword, but can't. He gets frustrated and wonders why.
1. He has only fulfilled ONE of the TWO requirements to using Atom Slice.
2. He has the Sword Attribute, but lacks the Piercing Attribute. Thus until he gets the two, he can't.
This time, this Long Sword has "Sword" and "Piercing" attributes.
Lenni attempts to use Atom Slice with the Long Sword, and successfully pulls it off.
1. He now has BOTH of the required attributes prior to using Atom Slice.
2. His Long Sword has Sword and Piercing weapon attributes, thus he is able to use it.
Evaluation:
Atom Slice: Sword / Piercing Weapon Attribute.
Short Sword: Sword Weapon Attribute.
Long Sword: Sword / Piercing Weapon Attribute.
Short Sword + Atom Slice = X
-Because the weapon lacks one (or more) of the physical attributes to use the skill.
Long Sword + Atom Slice = O
-Because the weapon possesses the required number of weapon attributes to use the skill.
That should give you a basic idea on how it works, and your problem should be solved.
So it has something to do with a weapon you've equipped. It probably doesn't have the "Smash" attribute box ticked.
THERE IS also another way to tackle this problem. You can create a
Duplicate "Smash" attribute, but this time make it a
magic type attribute. This allows you to use the skill regardless if you have the required attributes on a weapon or not. Because
magic attributes aren't physical, thus you can assign it to someone with a staff as an example. This should be done for
sub type attribute types like "Battering" "Piercing" "Heavy" "Smash" "Ramming" "Bionic" "Beast", because the damage is affected by their resistance type, and not the weapon.. I'll give another example.
I create the a skill I want to use on my Paladin. It's called
Holy Staff Strike. It's main attribute is
physical attribute "Staff", but I'm going to change that in the attribute tab. I'm going to make
"Staff" magic. So now my Paladin can now use
Holy Staff Strike regardless of wielding a Staff, or an Axe.
I hope this helps. I had to figure this out myself back when I was new to RPG Maker 2003. Hopefully this solves your problem and opens up other possibilities instead of limiting yourself to requirements off of weapons.

Edit: Just make sure if you're going to create a
magic version of smash instead, Untick the physical version in the Skill List, and tick the magical.
This post has been edited by Essenceblade: Apr 16 2012, 12:52 PM