It was nice that Smith found a Diamond in the rough...but all GM's including Terry Ryan make bad trades or moves...and Ryan has had more than his share.
That said Hardy had been injured and had struggled off and on for the year before and the year of his signing with the Twins. The Twins made the move to find stability at SS...someone that could play SS. Their selection was Nishioka...and if he was all that bad (which he was), the scouts and Terry Ryan who was assistant to the GM would have or should have said something. I believe if they would have Nishioka would have never been signed.
Contrary to your belief, Smith a self admitted 'non evaluator of talent' had to rely on his scouts and his assistants for input. If he didn't then I won't defend his decisions. I also believe that he did and though he pulls the trigger on moves, the scouts and assistants can share the blame.
The Thome situation: He was traded (waiver claim I believe) to allow him to have a chance to get into the playoffs. The Indians were his chance. It was a gesture by the Minnesota Twins to reward Thome for his almost two seasons with the Twins. Many in the game did not believe Thome would continue his ML career after last season...and as it's going this season...it may be his last. So, what ever value the Twins received was more then fair.
BTW it was mentioned by St. Peter and Pohlad that Smith was removed from the GM position because the parties had different visions. Smith wanted more money to improve the team and the Pohlad's didn't want to spend anymore. Ryan is a model for cutting payroll and playing with bare minimum...and it still shows this season.
So blame it ALL on Smith but this organization began to fall off the cliff years before Smith took the reigns.