Furthermore, if they die later, they consume more Social Security and other things generally consumed by older people.

If human life is valueless, then there are even greater savings to be had than allowing tobacco use or subsidizing extreme sports...

unless death by old age is substantially cheaper than death by lung cancer

It is. Ignoring the costs of dying years earlier to the person in terms of DALYs/QALYs, smokers work less, are less healthy, have more comorbidities, worse outcomes from treatment, their cancers are long-lasting and require more expensive treatment than other things nonsmokers would die from (compare months or years of fighting lung cancer in your 50s to dying of a stroke while asleep in your 80s). 'compression of morbidity'/rectangularization might also imply that diseases in late life will generically be cheaper because they are more likely to be quickly fatal and periods of disability shorter.