To say we should let the marketplace handle smoking pollution or any other health problems is like saying that the marketplace should handle the problem of sanitary food handling. The marketplace argument doesn't protect restaurant workers or children. The issue is public health. We don't let the market decide if people should drive cars with tires that come apart. The public isn't given the choice of paying less money for meat that hasn't been processed in inspected facilities.
Health is health, it has nothing to do with marketplaces.
Everyone deserves a smoke-free work environment. No one should have to breathe something that causes cancer to hold a job. One argument is that if the marketplace already is providing necessary smoke-free enclosed places, then laws would not be an imposition at all, and the ordinance only would serve as a safety net for a time when these establishments decide to be less responsible. Another argument is that while it's true that many establishments choose to go smoke-free on their own, laws must be in place because of the few irresponsible establishments that don't voluntarily clear the air of smoke. Many food service establishments would require their employees to wear gloves and hair nets even if health codes did not require it, but some would not be as responsible, and it is for these establishments that laws are written.