Humm, if the "sterling silver" ear wires you purchased cause an allergic reaction in absolutely everyone's skin, it sounds like they were mislabeled. Sterling silver is labeled .925 and contains 92.5% pure silver to which (usually) 7.5% copper is added as the alloy that makes it hard enough to work with. Unfortunately copper causes allergic reactions for some people.
Ear wires that are silver plated may also be the culprits, as plated wire consists of a thin layer or "wash" of silver over a base metal that may be nickel. Believe it or not, both stainless and surgical steel, used to make jewelry, also contain a small amount of nickel (8%). For these folks, it is best to use a product that is described as "nickel free" (which unfortunately still contains a tiny bit of nickel, but not more than .05%).
An alternative to all of this was thought to be Niobium, however as more people are using this metal for body piercings, allergic reactions are being found as well. To find stainless steel ear wires, or niobium ear wires, do an Internet search using those exact words.
As far as using steel for pendant and other jewelry designs, sure!
Answer contributed by Dale "Cougar" Armstrong