Even if Smith simply accepted the considerable offer the 49ers put on the table for him weeks ago, staying in San Francisco was his best option. Considering the mess in Miami right now, it truly was Smith's only option.
Smith can compete for a Super Bowl title in San Francisco. Coach Jim Harbaugh believes in Smith and knows his strengths and weaknesses more than anyone. Sure, Harbaugh believed in Manning more than Smith. So does every other human being who has ever watched football.
Free agency can be ugly business. Smith reportedly was upset with how the 49ers treated him and he considering switching agents (he and Manning share the same one).
Smith showed improved poise under pressure during the 2011 season. He did the same Tuesday, swallowing his pride and making the right choice to stay with the 49ers.