Is it legal to discriminate against smokers, in the workplace?

Yes, Of course it's legal. Smoking affects the worker and it affects the other people in the workplace.

Smokers HAVE to get their nick fix periodically, which means that they are taking breaks that they aren't entitled to, even if they smoke at their desk (which of course they usually can't do any more). This means that the nonsmokers have to take up the slack. I used to work with a heavy smoker, and she'd disappear into the bathroom about every 45 minutes. This meant that I had to quit doing what I was working on (I was working in the deli, and had to make salads and sandwiches) and cover her cash register. Then the boss would yell at ME because I hadn't made up all the salads and sandwiches. I finally said that I wasn't willing to work on a shift with her. None of the other workers would, either, because she was always running off and lighting up, and because the bathroom always smelled of smoke.

In some jobs, it's hazardous to smoke, for instance around flammable materials.

Plus, many smokers just smell like a dirty ashtray, and are not nice to be around. Some smokers don't seem to smell like this, but with most smokers, the smell is in their skin, not just in their clothes.

In this specific case, the company is looking for someone to be at that desk, not out back having a cigarette, and they are also looking for someone who is presentable. It's a totally reasonable requirement.