It was for maximum destructive power, and red matter needs to be ignited by a large amount of energy, such as the heat from a planet's core or a warp core breach when the Narada is destroyed.
It is physically impossible for a planet to become a black hole. It would be like a model T Ford flying to the Moon. Also, black holes are not actually holes. You can't pass through them. If you somehow managed to live long enough to reach the center of black hole you would find an object of incredible mass. To understand mass, think about the difference between hitting a pillow and hitting a brick wall. The wall is harder because it has more mass. Reaching the center of a black hole would be like hitting the ultimate brick wall. Not only did Abrams not get the Trek lore right, he did not even get the basic physics right. Science fiction has always played fast and lose with physics and that's ok, but anybody with a high school education would not be able to suspend disbelief to the point where they could buy this plot. In fact, many Star Trek websites laugh at this movie.
Actually Nero wasn't trying to turn Vulcan into a black hole his goal was to ensure that the entire planet would be destroyed by imploding on itself. Nero was turning the center into a black hole which would consume the planet. This is similar to how Spock shoots a red matter stream into the Hobus star to suck up the supernova like a vacuum.
To clarify, the red matter creates the singularity on ignition, it does not require a core of a planet or star. the intense heat and pressure greatly enhances the effect, the greater the heat and pressure the greater the effect. Dropping the red matter on the surface would devastate the planet but not guarantee total destruction, just like no matter how much red matter ignited after the collision, the destruction of the narada was confined to a comparatively small area compared to small amount causing a singularity that imploded a moderate sized planet, Vulcan and a sectors wide explosion, the Hobus supernova.