I see two major pieces to Smith making the decision that he made:
1) Atlanta was **** on 3rd down conversions (3/12, 25%), especially 3rd and long. The run was stuffed and the passing game was smothered. In all likelihood the Saints would have stopped the play and gotten the ball back on a short field. Up until that point the only TD by the Saints was made when Brees had a short field.
2) The Saints' offense was reeling. Brees had just thrown two interceptions and the Saints had not driven the field a single time all night long. The Falcons' defense was just as suffocating as the Saints and odds were great that if the Saints were buried within the 20-yard line, the Falcons would get the ball back and get it back with good field position.
Smart call by the coach; Poor execution by the defense.