The argument against Smith really comes down to the interpretation of two things: (a) how you define "free exercise of religion" (including how you define religion) and (b) the purpose of the First Amendment's religion clauses (whether you're an originalist or Living Constitutionalist or whatever).

First--free exercise of religion. Most religious Americans (and this was even more true at the founding) were various varieties of Christian, a religion in which "faith" (the inward persuasion or belief in God) is extremely important but outward actions are not. Yes, Christians do take lots of actions like helping the poor, praying, etc. but they're not compelled by their religion to do things like animal sacrifice. The one public, potentially objectionable action they're required to take by their religion is proselytizing but (surprise!) that's speech, and the right to free speech is already, arguably, the most protected right that any American has. The most serious problem with Smith is that it left non-Christian religions completely unprotected, including religions that compel drug use or animal sacrifice, vis. Church of Lukumi v. Hialeah, or religions that prohibit vaccination or life-saving medical interventions or giving your child a Social Security Number. All of these religions, post-Smith depend entirely on the kindness of their jurisdictions to make legislative exemptions for them. And some of these religions are scary or weird--think any jurisdictions are going to want to help them out?

Simply put, for religions that are conduct-based rather than faith-based, you can't be a member of that religion without observing that conduct. It's not about belief or just thinking quietly in your own head. If you can't engage in the conduct, you can't practice the religion, and if no one makes a special exemption for you, your religion and your religious community are kaput.

So that bring us to the second question--what's the purpose of the First Amendment, specifically the religion clauses? I'd argue that the purpose is to leave people's religious status as uncompelled as we possibly can. In other words, government doesn't make it easier or harder for you to be one religion or another; it swears to keep its thumb off those scales and let you make the decision for yourself. It can only intervene when your practice of your religion materially harms society or other individuals within society, but we already had a constitutional interpretation method for that--it's called "strict scrutiny," and it forces the government to demonstrate a compelling interest with any interference narrowly tailored and implemented with the least restrictive means. In other words, the (federal) government would check out every free exercise case on a case by case basis and make or reject exemptions to protect all those unpopular minority religions which were conduct-based. Smith says, "F**k that, the federal government can't be bothered; let those religious individuals try their luck with state legislatures." How long do you think those minority religions with their weird rituals can be expected to exist in that kind of environment? Isn't the government, which is sworn to protect and defend free exercise, throwing those religions and their practitioners to the wolves?

Basically, Smith comes down to the question of whose job it is to protect religious liberty. Is it the job of the politically independent judiciary, making case-by-case decisions using strict scrutiny and carving out exemptions to protect religious freedom and practice? Or, as Scalia writes, is it the job of the legislature who--having made neutral, generally applicable laws that just happen to mess up someone's religion--can decide to make an exemption for that religion, if and when they feel like it? I think you'll agree that (a) legislatures have traditionally done a shit job of protecting unpopular minorities and that (b) in some cases, it wouldn't be hard at all to pass a neutral, generally applicable law that just happens to really screw up some religious organization that your town/city/state really hates. But hey, it's neutral and generally applicable!

Though they're not always perfect, the judicial branch is the only part of the US system of government that has the political freedom and the power to protect the rights of unpopular minorities. For them to abdicate their responsibility, as they did in Smith, was shameful and devastating to religious liberty.