Yes it is. But it's not illegal for a private company to do it.
I'm a smoker and an employer. I'm going to side with Scott's on this. If that's their policy, then it was legal discrimination since smokers don't fall into a protected class. I can discriminate against people who shave, people who don't shave, people who are bald, people who have long hair, people who wear jewelry, people who wash with Dial soap, people who think Hillary Clinton is hot, etc. As long as I don't discriminate based on age, gender, race, national origin, religion, Vietnam vet status, disability, or sexual orientation (certain states), then it's my right as a private employer to make that call. If you don't like it, find another job.