You're right about inferior goods making a T&D program somewhat regressive (the canonical example is probably carbon). Still, the biggest winner is the non-smoking poor - there's just not as many rich people. Plus the whole point is to reduce bureaucracy - a simple dividend that everyone qualifies for is much lower overhead than pretty much anything else you can do with that tax revenue.

(And hey, I never said I supported it. tmvphil asked for less regressive alternatives to a straight Pigovian tax.)