I posted in the Wallabies 30 Man Squad thread, that the ARU could take the moral high ground with respect to playing Smith if they had no already compromised themselves. They compromised that position by actively pursing Elsom and Vickerman to play for the Wallabies when they hadn't signed with an Australian Province and hadn't played in Australia in the year they were to play. Vickerman did indeed play about 50 minutes with the Tahs before he was selected in the RWC squad.
It is a bit rich for the ARU to say they are taking the moral high ground protecting Australian Rugby from having the Super ranks pillaged by overseas clubs as the lure of the Wallabies jersey can be achieved no matter where you play. The fact remains that they sold that out with their actions for Vickerman and Elsom, the former hadn't even played a professional game in two years before getting an ARU contract and guaranteed Wallaby spot. The ARU has no moral standing, if they refuse Smith, one of 4? Wallaby test centurions, people can rightly ask what is the ulterior motive.