As far as the whole "realism" thing goes, Future War Commander is going to be just fine as it is based on the rules developed for historical wargaming and has produced satisfying results for many gamers which are sticklers for detail of a degree far greater than myself.
Found out another use for smoke is the shell game.  Artillery deliver smoke to 4 or 5 locations when you only need to move through one.  They'll all attract fire, but which do you shoot at?  Do you split?  Concentrate on one at a time?  I can see this being abstracted simply into a penalty to hit.
I'm just happy FWC doesn't handle smoke like an invincible force field.
That's weird that people don't think it'll stand up to tournament play.  Or is it more of a philosophy thing?  That they don't think it should have to?  Or that tournament play typifies a type of play not in keeping with the designer's prefered mode of play?
EDIT: Just wanted to add a link to some video footage of some Russian training exercises (there's no sound/commentary). I don't know exactly what is going on but from 3:00 on, there's some serious smoke work, tracer fire and whatnot.
http://www.youtube.com/watch?v=uyow0fxB1BM