Excellent question:
My own opinion is that smoke is probably completely unrealistic in ASL (I say probably because I don't have definitive knowledge of the history of smoke use). I base my opinion primarily on the infantry-owned smoke grenades in ASL.
I too have never read of smoke grenades being used for cover and concealment in any WWII book I can recall. The smoke I am familiar with is smoke related to river crossings, airborne assaults, etc-that involved in Corps, or Army level operations.
I have been an army officer for 17 years, and have never heard of smoke grenades being used for cover and concealment. I have used (in training) smoke grenades for signalling-thus the presence or color of the smoke is a code.
I have heard of smoke generators and smoke pots planned for use in exercises, but such assets are a Corps-level asset.
I have also encountered artillery-delivered smoke to be used in very particular and pre-planned circumstances-usually related to breaching a minefield and obstacle. But not as an on-call weapon for a company/battalion commander.
M1 tanks have the ability to 'drip' diesel fuel into their superheated exhaust and create a smoke trail out the back. The fact that its coming out the back suggests that it is most useful for either running away, or for follow-on forces (in other words, if you are driving towards the enemy, and smoke is pouring out the back of your tank, you are always in front of the smoke you generate). I suppose they could stay in place and generate a small field around their own position.
Thus, I have no idea what the smoke availability number of squads is supposed to represent. Each US airborne squad has a 50-50 chance of having a smoke grenade available whenever it wants, in unlimited quantities? My suspicion is that smoke is a cool gimmick with virtually no historical basis.
I may be wrong because 1) I haven't read every WWII book out there, and 2) I am not an infantryman-a tanker. Thus, maybe modern day infantrymen really do have obscurant smoke grenades that I've never heard of.
Steve