Brings up some interesting points.
I don't think Smith is unsalvagable. However, we are exactly the wrong team to get him. I would not trade for him unless other dominoes were going to fall immediately before or after. This also speaks to one of the unfortunate realities of our roster construction. Yes, I do believe we have some talented players. Unfortunately, the best talents, namely Sullinger, Olynyk, Rondo, and Smart are first of all redundant of each other, and second of all, all play the deepest positions in the league (PG and offensive PFs). If you want to look deeper, I bet the fact they play the deepest positions relates to how they slipped to us, etc. Unfortunately, this suppresses their trade value, because a lot of teams either have better or similar talent at those positions or can get 80-90% of those players at lower cost. Also unfortunately, it means the pieces we need to add (upper tier wing, upper tier C preferably with defense) are the harder pieces to find and acquire. I'd rather be set at the 5 and wing and need to find a PG and a millsap/sully type in today's NBA market.
Now, about Smith: He is a tried and true PF through and through, and the mistake has always been treating him like a 3/4. He is a 4. Maybe, as the previous poster suggested, even a small 5 in a sully/smith lineup. He is very good on the block and a great defender. He is very athletic. He is a terrible shooter, and it's not necessarily just about bball IQ, but when he is playing with monroe and drummond, he just shoots the open shots from the space where he can navigate; when those guys are in, all he can do is get open on the perimeter. That's coaching and roster build.
Our roster would be best if we could add Drummond instead. But this is not happening. I kind of like monroe, but I absolutely would not trade for him since he is a UFA with no bird rights. If Wallace is in a trade AND green declines his option we could probably afford to sign him and still re-sign rondo, but it would be hard, and we'd still then need a SF. He still wouldn'd really bolster the frontcourt defense, and if we ended up with Monroe, Smith, Sully, we'd have the same problem as Det.
In summary, keeping olynyk and sully and trading for Smith would probably not make sense unless we actually think very small ball would work. It's actually kind of fun sounding. Smith needs to be a 4, he is a failure at the 3, and an unknown at the 5. Now, if somehow you dealt sully and olynyk for a stud C, then yeah, he's probably still an above average at least PF.
The other possibility is a multi team deal. For example, I don't much like Kantor because he's a little plodding, has stagnated some, and his defense is suspect but he's a real C at 22 yrs giving you a 13/6.6 in 24 minutes. Now, Favors has always been a binky of mine and i would have given up quite a bit for him earlier; unfortunately he looks good enough now that he's unlikely to be traded, with a 16.3/8.2/1.5blks in 31 minutes for a 23.7 PER as a 23 year old.
But let's say Det just wants Wallace and a protected pick for Smith (they just want him gone). Then give Smith to Utah. Utah gives Kanter to us, and they get better roster balance. Or, Smith goes to Utah and we send Olynyk to Utah with a pick as well for Favors.