Smith could have gotten a lot more as a free agent. He clearly wanted to stay with the team. Moving forward, it's not a bad deal. He may not be a true 25 goal scorer, or even a regular 20 goal guy. However, he is quite versatile, and plays a big 200 foot game. Wins draws when needed, goes to the tough spots, and brings a lot of effort to each game. If he plays with Stone moving forward, his points will be decent enough as well.
EDIT - pointed out by someone on Twitter comparing Smith to Andrew Shaw. As good a comparison as any I suppose. Quite a bit less on less term for Smith. I don't think this deal hurts Sens in the long run. Or next year for that matter.