The power to tax is the power to destroy.
Needless to say, not evey tax is destructive, just as not every driver is a deadly menace who needs to be gotten of the road a.s.a.p.
Have you been on the interstate recently? ;)
Whether you agree with the assessed level of negative externalities or not (I don't, actually), the tax hasn't "destroyed" anything. Smoking still exists. Fewer people get sufficient utility from smoking to go on doing so, but that's the point of the tax in this case. Too many people were smoking previously due to market inefficiencies. Now the "correct" (again, I believe the externalities were lower than many people believe they were) number of people are smoking.