If smoking is to be considered a privilege and not a right, then veterans have earned that privilege. Many veterans had to work in an environment that contained substances far more hazardous than secondhand smoke. The most notorious of these is secondhand lead. Secondhand lead has been known for centuries to cause brain damage, organ failure, paralysis, and death.
Quite a few of these men were not given a choice of whether they wanted to work in that environment. You can quit a civilian job anytime you want. But it's a lot harder to get out of the military than it is to get in. So at least let veteran's clubs smoke.