The main hurdle with smoking on a plane is, actually, safety. Not in the sense that a smoker literally lights up the plane, but in the sense that the pilots would have a much harder way of telling when there is a real fire since the smell tends to distribute well throughout the closed interior.

Once I heard a pilot announce out of the blue, non-scripted and during the time they were not supposed to, that smoking is prohibited and I spent the next third of the flight thinking that either someone smoked in the restroom or we have a fire in the baggage compartment.

As a passenger, I am yet to encounter a plane where smoking is allowed (and I have flown Air Serbia, so take that for what you will).