The problem here is everyone dies, and having people die of lung cancer at an early age costs the healthcare system less than having them die of some other form of diabetes/cancer/heart disease 15 years later. The studies that talk about the costs of treating cancers related to smoking are not giving you a picture of what else the same people would be treated for before they die. Really the worst thing for any healthcare system is to have lots of elderly people going through expensive treatments to prolong their life, and after you end all smoking, you'll find you have even more elderly people going through expensive treatment, except the types of cancers will be more evenly distributed.

it's entirely possible that smokers have lower lifetime healthcare costs due to living significantly shorter lives on average. they certainly draw less social security.

https://pubmed.ncbi.nlm.nih.gov/22449823/

Agreed. It's a balance though, you don't want to create a black market for the things you make illegal. For some reason I don't see menthol cigarettes becoming a black market but I can't say the same for flavored vape cartridges.