Machines suck to me because they constrain you to a fixed path or plane of motion, and pretty much nobody's extremities and joints are of the exact geometries to coexist within that framework. You end up trying to reposition yourself around the machine mid-exercise (perhaps subconciously), or else live with weird out-of-plane stresses on your joints. Either way, this becomes more dangerous as you increase the weight you're moving.
The bar doesn't move in a purely vertical line on a squat, but it does when you're squatting in the Smith machine, whether your lumbar spine, hips, knees, and ankles like it or not. Again, this may not be an issue with light weights, but as you progress, suddenly you start developing nagging joint pain, because the machine is effectively giving you piss-poor form. The more range of motion with the exercise, the worse it is. My only use for a Smith machine is standing calf raises, with a ROM on the order of a few inches.