So let me get this straight: Watchmen is a story that includes a hero who is racist and anti-black (Captain Metropolis), another who speaks favorably of Hitler (Hooded Justice), features a brutal rape scene, shows a little girl murdered then cut to pieces and fed to dogs, has a main character who is struggling with sexual dysfunction, and maybe a dozen other very bad images and concepts...
...and yet showing a grown woman smoking is supposed to be worse than all of these things?
I can't figure that one out at all. Especially since Laurie's smoking, I thought so anyway, is foreshadowing for a certain big reveal about her character later on in the book (and presumably the movie).
This kind of "political correctness" all too often goes way too far. Studio execs like Horn really should take a more hands-off approach with stuff like this, and trust the directors and producers and script writers with how they want to bring their vision to life. I'm not saying forgo all accountability, but this situation really is micro-management to the extreme.