My personal opinion is that a knife has to conform to several requirements to be useful for diving, although the requirements can vary with location and diving activity.
1. As a rule the knife should be large enough to do the WORST job it could be asked to do in your area. A 2" blade while spearfishing for 6' long fish in an area of entanglements is a bit of an understatement, although a 10" blade whle spearfishing for "plate sized" fish can be much of an overstatement unless there is a significant entanglement hazard. It is usually possible to do a job with a large knife that could be done with a smaller one, but the reverse is not always true.
2. A dull knife is a really bad club, and not much use except as a pry bar. As a cutting implement you'd be better off using barnacles than a dull blade.
3. 300 series SST is pretty much the bubble gum of steels. Corrosion of the edge will dull the blade over a couple days diving EVEN IF IT'S NOT USED TO CUT ANYTHING! Stainless means the corrosion products won't stick, it does NOT mean it isn't corroding! A 300 series blade needs to be resharpened before EACH dive for it to be useful and not a hazard to it's user.
4. 400 series Stainless Steels are capable of holding an edge long term, and require minimal attention with a stone before each trip. A rinse and dry after each dive trip is generally suitable maintainance.
5. 17-4 PH is good steel, but at H900 (where it holds an edge best) it's pretty brittle. It's not difficult to snap off a shaft tip or thread at this hardness level. I've done it several times. At H700 it's more ductile (as for shafts) but won't hold the same edge. As solution annealed (i.e. as purchased from the supply house) it's not much better than 300 series. It's the heat treatment that makes or breaks this steel.
More data is available here:
http://diverlink.com/gear/knives.htm