I love Smarty and have for years (so you are welcome to shoot me out back, BestXXXPorn
)
The main issue is just like PHP, people dive right into using it based off some examples they found on the web or Smarty's Crash Course. I would wager that most people use only 5% of Smarty's features and functionality if that. This leads to messy, redundant coding and complex templates.
In my case, I write many of my own Smarty extensions and modifiers and it allows both my PHP code and Smarty Templates to be extremely simple and clean
BestXXXPorn, you are correct in your statement that you are adding a layer upon another layer, but if you take advantage of all it has to offer, it IMO is a very useful tool.