In previous SimCity games simulation was performed on the macro scale - not on each citizen. Any micro-scale view was just a visualization of the macro simulation. This meant you couldn't follow a sim's car from home to work and back, but it also meant scalability and the freedom to have a proper simulation model rather than a grossly dumbed-down one.
Agent-based simulation is the correct implementation (i.e., closest to reality) technically, but only in a world where we have infinite CPU power. A macro-simulation like previous SimCity games would have meant far fewer corners cut and a much less buggy behavior that are the result of emergent negative agent-agent interactions.
To take your analogy - SimCity 3000 and SimCity 4 use billboards and textures for fake smoke. SimCity 5 tries to go all-in and simulate the hydrodynamics of each particle - but has to cut so many corners to run that it doesn't even look like smoke anymore.