Smokers spread toxins to the air that --usually-- others have to breathe. This is simply not tolerable, as everyone has the right to protect their health.
Banning tobacco would firstly encourage many smokers to quit, and secondly (and most importantly) force those who wished to continue the habit to do so in places where non-smokers couldn't smell it, since they'd otherwise end up getting reported.
There would surely be losses in tax revenue, but this would largely be compensated for by the decreased burden on health care systems, and by fines imposed on smoking. All the farmland used for cultivating tobacco could also be used for something more productive --- buildings, solar energy, producing food, etc.
Smoking is quite literally the cancer of society. It should definitely be banned ASAP.
If tobacco should be illegal, so should high fructose corn syrup, large sodas, carbon monoxide emissions from cars, coal plants, tornadoes, hurricanes, swimming pools and anything else that can kill a human. Tobacco will only go away when enough people stop buying the poisonous products to reduce demand and farmers move on to grow something else. Supply and demand will determine tobacco's future. Medical science says tobacco is bad for you and more people are listening, but it still hasn't been enough to eradicate smoking altogether.
In the grand scheme of things tobacco isn't something that will ever become illegal or prohibited. Because of this I think that the government should put in place many institutions to dissuade the use of this harmful and deadly drug. Outright prohibition should not and won't work. But heavy regulation will help stop some usage.