Immutability and reproducibility is great. Depending on unreliable and antiquated hardware, like the USB key sticks, is not.
Who exactly has the environment where you can add, let alone promptly repair/replace, USB key sticks, on your server? Or run PXE when you have just a single server? How exactly do you do that in Hetzner or OVH? Let alone any other service where you get just a single dedicated server or two.
So, we're big enough to have our own quarter-rack in a collocation facility, let's do PXE. Now you have to have a whole separate infrastructure server, just for your other servers to be able to boot properly? (And how exactly does that server itself boot?) Plus, have an extra infra server for redundancy?
Sorry, but this is the reason noone would use SmartOS. You can't build a fortress on such a shaky foundation.
It's simply out of touch with the target market. At least with FreeBSD or OpenBSD, you known it'll just work™ on any single server, as long as serial console access is available, which is standard-enough. Going against the mainstream of Linux is already hard-enough, there's no reason to make it any harder.
SmartOS sounds like a lot of work, for negligible or even negative benefit.
There's zero good reasons why any machine with 450GB+ of zfs-backed redundant storage, needs to rely on USB keys or networking, in order to function properly. There's a reason Samsung's Joyent entirely abandoned and divested of SmartOS, because this sort of over-engineered mentality, simply doesn't compute. It prevents all sorts of usecases, and even with a growth mindset, still prevents the organic growth from a couple of servers to a rack and more.