I don't think smoking should be allowed in restaurants because of the public health threat to patrons and employees. Here's data that supports this:

According to research gathered by ClearWay Minnesota:

Exposure to secondhand smoke poses significant health risks. Exposure to secondhand smoke is responsible for at least 3,000 lung cancer deaths and at least 46,000 coronary heart disease deaths each year. Even limited exposure to secondhand smoke has negative health consequences. According to the U.S. Surgeon General, there is no safe level of exposure to secondhand smoke. Secondhand smoke is expensive. The annual direct health care cost of treating tobacco-related illnesses in the United States is estimated to total more than $9.5 billion. Cigarette smoking and exposure to tobacco smoke also cost $92 billion a year in worker productivity losses. Indoor smoking policies substantially reduce exposure to toxins and carcinogens. Secondhand smoke contains 11 known cancer-causing agents and 250 known toxins. Research has shown that indoor smoking policies significantly reduce levels of airborne cancer-causing chemicals. Hennepin County’s comprehensive smoke-free ordinance helped reduce harmful air pollution in bars and restaurants by 99 percent.

Smoke-free laws do not discourage business activity. Independent, scientific economic research consistently proves that smoke-free policies have no net negative impact on the hospitality industry. Business tax receipts for New York City restaurants and bars increased 8.7 percent after implementation of that city’s smoke-free law, and bar and restaurant employment went up by 10,600 jobs. After passage of a comprehensive statewide clean indoor air law, California bars and restaurants had 218,300 more employees in 2005 than they did in 1995. In 2006, the U.S. Surgeon General reported that “smoke-free policies and regulations do not have an adverse economic impact on the hospitality industry.”