Any government that decided to ban smoking altogether would simply be shooting themselves in the foot. Not only do cigarettes provide a useful source of revenue for the government; smokers are also voters too, and since a significant percentage of the population continues to smoke politicians are hardly likely to want to alienate them. Most European nations have introduced legislation to restrict where people can smoke in public, which seems to have been widely accepted, but none have gone so far as to actually ban the practice of smoking. This is despite the fact that smoking is likely to lead to premature death, increasing the risk of developing lung cancer, emphysema, and heart disease.
Governments are still reluctant to ban smoking altogether, though, because smoking has been a noticeable feature of our society for quite some time. Smoking is not regarded in the same way as taking Class A drugs is, since it is very much a part of the mainstream, and thus attempting to ban smoking altogether would not be tolerated. It would also be unenforceable since too may people would flout the law and continue to smoke, peeved at being told what to do. Even non-smokers would probably muster up support for smokers to be able to continue smoking, feeling that they have more in common with them than the politicians trying to dictate what they can and cannot do.
Adults are old enough and informed enough to know the damage that smoking does to their health, and therefore it is up to them whether they continue to do so or not. The ban on smoking in public places seems to have been tolerated by most people since it in the best interests of bar staff and other non-smokers who may come into contact with second-hand smoke on a regular basis, thus potentially risking their health through no fault of their own. Smokers are not prohibited from smoking completely, as they are still free to smoke outside and in their own homes, but they are not allowed to jeopardise other people's health in pubs and clubs.
Most people would assert that the real reason why most governments would not consider banning smoking altogether is the fact that the tax on cigarettes can be a real revenue generator. This may be partially true, but the cost of smoking to the economy also needs to be considered. The government may receive a substantial amount of money from cigarettes, but it also has to provide funding for healthcare services. Since smoking-related illnesses tend to be amongst the most prominent killers there needs to be a proportionate amount of money to spend on tackling these problems, both in terms of prevention and cure.
Governments won't ban smoking altogether because they can't. Living in a free society means people should have the right to make their own decisions, and so long as they are not hurting anyone else it is up to them whether they engage in behaviour which ultimately reduces their life expectancy. It is not for politicians to use legislation to try to alter their behaviour.