Smoke is either used for retreats, Los block against HMG's, or to charge the enemy by surprise. You only do so with close combat troops as anything ranged will be put at a disadvantage. If the enemy did not move (either a. Does not suspect you to charge into the smoke or b. Is a team weapon) then you cut them down. If they did move, you just retreat back into the smoke; never you simply "die on the other side".
Meant for shocks for obvious reasons, as long as they have 4 or more men alive.
Smoke is the absolute best for capping a point or holding an objective and forcing the enemy to come to you. For instance, in a close game were VP's on both sides are getting extremely low smoke can be an excellent way to allow your troops to cap with impunity.
Against skilled players the value of smoke for rushing positions drops off heavily mid to late game as they will have enough MG's covering each other that you will need a lot of smoke.
Then that is a problem with everything that can squadwipe (and most importantly, CoH2 unit formation forever locked out of modding and out of the engine's league).
Squad wiping early game isn't normally due to explosives gimping your bunched infantry (other than early nades), it's normally just due to unlucky RNG. I just feel like making the starting units more forgiving with their durability would be nice way to make early game less of an insane micro test.
You can keep a squads DPS the same even if you increase the models, so I don't see why it's an issue. The "Axis 4 men Soviets 6 men" standard has been dead for a while, I fail to see why we need to stick to it