First of all, it's not lethal enough. It's nasty, but it only kills ~30% in even the most virulent outbreak.
Second, the blowback potential is just too great. All we'd have to do is find a few infected folks and put them on airplanes to Damascus, Beirut, Cairo, Tripoli, Tehran, and Riyadh. And smallpox, unlike Anthrax, is not truly "assymetrical." A first world healthcare system is a hell of a lot better equipped to deal with it than a third world system.
I'm with you. Smallpox is code for anthrax.
If you haven't read it, I urge you to read the link in Post #3.
Announcing a vaccination program for smallpox is great way to get people mentally prepared for the next step. If you watch the way the news reports are developing, the story is coming together from both ends -- here we see Cheney has layed out Saddam's biological deterrent strategy, meanwhile they're gradually "uncloaking" the real story on last years' anthrax threats. Pretty soon, things are going to meet in the middle. This has been a masterful manipulation of public perceptions, IMO, and fully justified under the circumstances.