My concern over air quality is that you will have athletes pushing themselves to the limits. I hear of smog alerts in Toronto (canada) advising the old and people with respiratory problems to stay indoors, i hate to imagine what would happen to athletes with China's smog.
You can tell me all you want about how people live in this smog and how you walked around in it with no ill effect, it is irrelevant. These athletes will be sucking in huge volumes of air and push themselves to their physical limit, and I don't know what effect the smog will have but it will not be good. Show me the tests done to disprove my fears before saying there is nothing to worry about.
China will have to shut down every factory and every road to public traffic upwind of the events long enough for the smog to dissipate, it's that or multiple delays with bad smog days and possible heath problems cropping up (god forbid deaths) which will make China look like crap. But this is China, they might do just that.