One would hope that the smoothing code is smart enough to recognize that if neither party is moving, then there is no smoothing necessary.
It is, if both parties are on solid broadband connections and updating the server constantly with updates that their planes are absolutley not moving.
Thing is, the nature of this game is that things move... and they move very fast and quickly. Given that, it is also smart to have the smoothing code constantly running in the background. As I said, as much as it's obvious that this is to assist with slow connection users (IE: 56K), it is probabley less obvious that this is also an assist for those of us on stronger connections, as we may not be loosing 10-20% of our data over the connection, but we're still loosing 1-0.1% (so for that 1-second hickup in your connection during a 5-minute long dogfight, your opponent didn't see your plane skip 50-feet).
Overall, it is a fundamental and critical component of the game and it's competitive online playability. To think it is unecessary otherwise is simpley a lacking in understanding the reality of the internet, or a belief that all ISPs are in it for 100% service continuity and quality to their customers above profits - it simpley isn't true.