I am all for the owner of the business having the right to hire who he wants to hire. Even if it is only people who don't smoke OR people that DO smoke. Its his business, if it fails or succeeds is all on his decisions.
IN theory I agree... But based purely on statistics, you could replace the word "SMOKER" in that article with "Obese person" or "minority" or "women" and you'd technically be correct as well. Does that make it ok? Probably not!
The sad reality these days is that due to PC, it's ok to discriminate against certain groups of people but not others... I don't care either way, but at least be consistent!! I smoke, and I'm more productive than 98% of the people I work with... and I'd be ok with paying more for insurance, but eliminating me from a job because I smoke is just retarded!