Smoke grenades probably wouldn't cause as much lag as you would think, a well done smoke grenade could probably be done with 5-6 polys at any given time (10,000 polys MAYBE if we had 2000 people all clumped up in one facility. If your computer cant handle 10k polygons you're not gonna be playing PS2).
The real problem has already been mentioned, being hundreds of not thousands of players all spamming them and the lack of visibility, and just general annoyance of them.
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