1. that smoke itself is cover, which eliminates the 2x damage multipler.
Not if my reading of Total Warfare and TacOps is correct.
Total Warfare pg.216
"Clear terrain: Conventional infantry hit while in Clear terrain suffer twice the normal damage. This includes damage received from infantry and burst-fi re weapons, as well as other non-conventional
infantry-mounted weapons, Area Effect weapons and so on."
Clear terrain with smoke in it does not become smoke terrain, it remains clear terrain with smoke in it.
Tactical Operations pg.57
"Light smoke acts as light woods for purposes of line of sight and attack modifiers......Heavy smoke acts as heavy woods for purposes of line of sight and attack modifiers."
attack modifiers being the penalty added to the to-hit result. This in no way effects the "clear terrain" clause of Total Warfare. The infantry are harder to see, but there is still nothing to keep the bullets or flames from ripping straight through there bodies like there is in hard cover.
2. that smoke stacks with woods cover.
Sure, but at that point, the argument should be "smoke is awesome, use it every chance you can for awesome cover", as it no longer specifically applies to infantry disembarkment. Indeed, there's no reason why an infantry unit in woods needs an additional to hit modifier in the turn it disembarks any more than it needs it any other turn in the game.
3. that smoke, combined with more smoke or woods can create LOS blocking terrain.
Indeed, but once again relying on that to unload involves telegraphing your plans.
On open battlefields (non-urban) infantry's goal is to negate terrain. Either negate it so the opponent's fire support cannot use it against you. Or so that it deters them from taking it, and your fire support can use it against them and then provides some additional support should said opponent attack your fire support.
Of course, but by firing smoke at or near a patch of terrain, you have telegraphed to your enemy the intention to use it, thus insighting him to get to it first.