Committing big money to Smith would be a mistake for the Knicks. Considering how close they are to the luxury tax line, Smith's contract would be an unnecessary luxury.
Assuming Jeremy Lin, Landry Fields and Steve Novak are all brought back, the Knicks will have eight of their rotation spots filled with those three, along with Carmelo Anthony, Amar'e Stoudemire, Tyson Chandler, Iman Shumpert (when he recovers) and Jared Jeffries.
Smith's shooting guard spot will be occupied by Fields and Smith; his shooting role will be filled by Novak, and his lack of defense will be filled by Anthony and Stoudemire.
Considering that the Knicks will likely use their mid-level exception on a veteran, that doesn't exactly make Smith seem like a necessary piece to New York's long-term puzzle.
He's a ball hog on a team filled with ball hogs, and a defensive liability on a team looking to push their identity away from that direction.
If the Knicks really want to become a team built for Mike Woodson, they'll get as far away from Smith as possible. They'll use their free-agent money on a defensive-minded player and try to change the culture that Mike D'Antoni brought.
Last year's offense was stagnant. There was no ball movement, as Amar'e Stoudemire and Carmelo Anthony tried to play one-on-one too often. Keeping Smith in that system will make it that much harder to fix. If the Knicks are insistent on bringing in another shooter, they should get one who can come off of screens and doesn't need half of the shot clock to get set.
In a perfect world, the Knicks would keep most of their team intact with just a few additions.
Jeremy Lin will be the starting point guard with Jason Kidd joining as the backup.
Landry Fields and Carmelo Anthony will cover the wings, ready to be relieved by Iman Shumpert, Toney Douglas and a mid-level free agent.
Finally, Amar'e Stoudemire and Tyson Chandler will be the big men with Steve Novak and Jared Jeffries as contributors.
That's a roster that can compete—assuming the players learn how to play together. There's no room on that team for Smith. He's a liability on defense and a black hole on offense. He has a place in the league, but not with a team that hopes to compete. Especially not this one.