Wow, so much has been already said but I don't know where to start!
About the smoking point of EVOO, what I do know is that olive oil as well as canola oil are mono-unsaturated fats. Other vegetable oils are poly-unsaturated fats and butter or hydrogenated oils are saturated. Elementary chemistry teaches that in terms of stability to heating, saturated fats should be the most stable, then mono-unsaturated fats, and poly-unsaturated fats should be the least stable. Since smoking in an oil that is being heated signifies the beginning of thermal decomposition, one would then expect that poly-unsaturated fats should have a lower smoking point than canola and olive oil, which in turn should have a lower smoking point than butter or hydrogenated fats. Contrary to this expectation, a lot has been said in a lot of places about olive oil having a lower smoking point than some poly-unsaturated fats. To me this stretches the limits of credibility considerably. However, for the sake of argument, I would assume that it has some basis.
Even assuming that olive oil has a lower smoking point than, let's say, safflower oil, the only valid implication I see is that one may not want to fry anything in olive oil for health reasons strictly. However, frying and cooking in olive oil are two different matters. I can see no chance of the oil in a cooking pot containing several other ingredients and some water as well getting any chance whatsoever to reach smoking point. Therefore the notion that olive oil is unsuitable for cooking (as opposed to frying) is patently wrong.
Beyond smoking points, one must also consider matters of taste when it comes to cooking. For a lot of people, especially around the Mediterranean, the characteristic taste that olive oil imparts to food is synonymous with 'good taste' and that includes fried food as well. For the rest of the world, there could be a choice as to what oil to use when cooking or frying.
Regarding cost factors, for a lot of people around the Mediterranean, olive oil is either 'cheap' or 'free' because they produce it themselves. For a professional establishment, a cheaper vegetable oil may be a better choice for frying based on costs. However, no matter how important cost factors may be, I do sincerely hope that this choice is never pomace, which is, in my own opinion, unfit for human consumption.
Finally, the hazardous substances that are produced when oil in general reach their smoking point are called free radicals. They are very reactive and do cause chain reactions in the human body which are responsible for the aging process as well as the onset of cancer. The body has ways of counteracting them and some food supplements are also helpful in this way. Nevertheless, continual exposure to free radicals is likely to take its toll eventually. These free radicals are the reasons doctors advise against eating deep fried food. If health concerns are significant, as they may very well be, one should think more towards eliminating deep-fried foods from his/her diet rather than looking for the perfect oil to deep-fry in.
As a matter of curiosity, what happens if when deep-frying one adds the food to be fried to the heated oil BEFORE the latter reaches its smoking point? Shouldn't the mass and consistency of the deep-frying food act as a barrier to the frying oil reaching smoking point?