You really can't expect every human function to be available in a video game. There wouldn't be room for anything else.
But there apparently was room for http://fallout.wikia.com/wiki/Jericho_(character) in Fallout 3:
"If you place a cigarette, pack of cigarettes or carton of cigarettes into Jericho's inventory, he will chain smoke when idle, without actually using up the cigarettes you gave him. He will not smoke when wearing a helmet that covers his mouth (i.e. a Power Helmet), and will complain how he wants a cigarette. He does manage to smoke, however, when wearing the Enclave Hellfire Armor helmet. "
Aside from Jericho, several NPCs are seen smoking in various places. Greta from Carol's Place in Underworld can be found outside the Underworld entrance smoking at times.
So, the question of room for the assets isn't really an issue since the assets obviously already exist. Rather, it becomes a question of why the activity itself is considered "alright to be shown in-game" but why the
player character isn't allowed to.
Not that I'm bent about it myself- but the assets are indeed already in the game and in use, sooooo...?