Well, I guess Michigan will be getting a statewide ban on smoking in public (i.e., private) establishments soon. Sad, both for the woman who died from a smoke-induced asthma attack and for the state of our civilization that we cry for government coercion to solve every problem people face. This restaurant was neglectful in hiring a person who had bad asthma and letting her work in a smoky environment, so I think it'd be perfectly right for them to be sued into bankruptcy. While that wouldn't be as effective at eliminating smoke from all restaurants, it would be more effective at getting businesses to be more judicious in making their own decisions about whom to hire and whether to allow smoking in all or part of their restaurants in the future.
Another aspect of this issue that I think libertarians are on the right side of pertains to unintended consequences and the ol' slippery slope argument. A couple unintended consequences I can think of stemming from smoking bans are: bars and restaurants are likely to become less liable for other neglectful decisions in the future because they just rely on the State to permit or forbid everything they might do, eliminating private decision-making and therefore private responsibility from the picture; and the likelihood of stifling business for bars because smokers don't go to them as often or spend as much money there. (Though I have heard people argue that in some states their business actually increased after smoking bans.)
The slippery-slope argument is obvious so I won't harp on it. What bad things should the State forbid and which behaviors should it allow? Maybe a more important question: Who shall decide what to forbid and allow? Recognize that there is no qualitative difference between forbidding cigarette smoke, or alcohol, or fatty foods, or serving shellfish or peanuts in "public" (i.e., private) establishments and forbidding any one of them in private homes or outdoor "public" spaces. Some examples of substances that are already forbidden to that degree are marijuana, cocaine, heroin, etc. And we see the incredible degree and scope of evil that the Drug War has caused: far more evil than the death of one innocent waitress.
I just believe in the ability of freedom and not State coercion to produce the maximum good in society. Which doesn't entail zero deaths of innocent and blameless people; I would never claim such and neither would any libertarian. Perhaps you should put a little less trust in people who include that as a worthy goal of State actions. Perhaps, given the State's track record throughout history and especially last century, you should put a lot less faith in the State's ability to effect any decrease in unwarranted morbidity or mortality.
Two quotations from very bright scholars come to mind:
Only a totalitarian society would even claim absolute safety as a worthy ideal, because it would require total state control over its citizens' lives.
—Ron Paul (referring to national security, but apt for medical "safety" as well)
What is ominous is the ease with which some people go from saying that they don't like something to saying that the government should forbid it. When you go down that road, don't expect freedom to survive very long.
Keep in mind that this woman who died also has to bear some of the responsibility for her decision to work in a smoky bar. I don't think she ever could have expected to die from it, though, so I can't really blame her too much. A lot of my friends and I worked at places like Wal-Mart, Target, Best Buy, and fast-food restaurants in high school and college, and businesses like those are almost always hiring. If they aren't, I'll bet dimes to dollars it's because of the State's weakening of the economy. When arguing about issues like this, please be honest and don't even think about suggesting that she was "forced" to work in a smoky bar. She and her employer made a series of bad decisions that resulted in her death. I don't claim that a smoking ban wouldn't have saved this woman from dying of an asthma attack, but I do contend that there are better ways to avoid cigarette smoke, that a free market can determine and respond to the demand for smokeless bars better than the State can, and that the price of totalitarian direction of personal behavior (fascism) is far, far greater than the occasional asphyxiation.