I think you're failing to grasp the distinction between the quality of a person that they are "a smoker", and the person's activity habits, that they require smoking breaks every hour.
A smoker who doesn't smoke during work hours wouldn't have the productivity detriments you mention, and it would be none of your business what they do at home.
Yep. It's not like an employer is required to allow a smoker a 5 min break every hour to have a fag. If it's made clear from the start that smoking is only allowed at tea breaks and lunch breaks then all should be fine. It's irrelevant what an employee does during their breaks.
It can be argued that small regular breaks (to have a smoke, go to the loo, make a cuppa, gossip around the water cooler etc) increase productivity, not decrease it.