[digz]

Your points are all very valid of course. While utility theory has largely been superseded by prospect theory, like Newtonian physics, it can still be useful for back-of-the-envelop thought.

Furthermore I'll be a devil's advocate however and just make the point that one could rationally defend tobacco use as utility deriving. Just because a (in my view) sane person would see all the horrible effects of tobacco as trumping any positive attributes, someone else may disagree. Depending on one's own discount rate, tobacco use at any point in time in fact be net positive in enriching their life. Even if you argue that some of the positives are created by advertising cigarettes as cool (Joe Camel, etc.), so what? Someone spending $50,000 on a fancy watch is also making the same sort of determination. If the user derives the benefit, regardless of whether it's endogenous or exogenous to the product itself, that isn't obviously inherently bad.

Now, of course, smoking has it's own set of problems because it negatively affects others... but again, it's not so clear that one can't attribute rational decision making to even a smoker.

All that to say, your point is well taken.