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That's indeed often one of the issues.

Notwithstanding companies that have gone 'smoke free' per their agreement for medical insurance plans (they're a different story), if a boss has issues with smoking among his employees, it's usually because it affects work.

Are you gone ten minutes out of every hour, often enough that the boss notices it when he comes out to ask you something and you aren't there?

Do you smell strong of cigarettes? It's not pleasant to be around someone who smells strongly of cigarettes. I do smoke, but I recognize the problem. I don't smoke in my own house because I don't like my clothes to be permeated with it... I don't let my car fill up with smoke on the way to work, and when I am done smoking at work, I chew a mint, wash my hands and face, and apply a little spray de-oderizer (odor killer, not a perfume). I'm a little obsessive about it, but it makes a lot of difference. Most do not know I smoke when I show up for meetings at a new office.

Then there are the issues with health. Not nanny type healthy yuppy issues but issues like are you sick or hackin' all the time?

I'm not making assumptions that any or all of these occurred on this job, but those are the reasons smokers can be less desired even in workplaces that are not anti-smoking as a policy. And any of one of them can be overcome with competence on the job, but any one of them can be 'trying' to be around, and might be a strike against you.