Despite Humphrey Davy's discovery that inhalation of nitrous oxide could relieve a conscious person from pain, another 44 years elapsed before doctors attempted to use it for anaesthesia.
The method did not come into general use until 1863, when Gardner Quincy Colton successfully started to use it in all his "Colton Dental Association" clinics, that he had just established in New Haven and New York City.Over the following three years, Colton and his associates successfully administered nitrous oxide to more than 25,000 patients. Today, nitrous oxide is used in dentistry as an anxiolytic, as an adjunct to local anaesthetic.
Nitrous oxide was not found to be a strong enough anaesthetic for use in major surgery in hospital settings, however. Instead, diethyl ether, being a stronger and more potent anaesthetic, was demonstrated and accepted for use in October 1846, along with chloroform in 1847.
Source: Wikipedia
tldr: It was not good enough for major surgery, but it was good enough for dentist work.
