Address the infinite reproducibility of holy water by making it so that dipping uncursed water in holy water produces “diluted holy water” - the water isn’t what’s diluted, but the holiness is. Potions of diluted holy water are still good for blessing other items (or possibly, a tougher approach in which they sometimes bless an item and sometimes do nothing), but can never be used to bless more uncursed water.

It would also of course be possible to get diluted unholy water, with the same behaviors.