I don't think the situation is too dire.
-He's relying too hard on his 3, but at least opposing guards are defending it. It doesn't start to become a liability until opponents start sagging aggressively; people aren't guarding him like he's Curry, but they aren't giving him wide open looks (like they do against Rondo), either.
-I'm not sure why people think he isn't a PG. Stevens did start the year with him at PG next to AB and Crowder, so clearly he thinks that Smart is capable. He's no Rondo, and he isn't a good playmaker at this stage, but he has very good instincts + court vision + passing.
Smart is below average but not a liability on offense, and his defense is so good that he's a very good player despite his offensive shortcomings. If he can raise his offense to the level of an average starter, he'll be an allstar-level contributor, even if he will never actually make an all star game due to bias against defensive-minded players.