The OP's outrage seems to be more geared towards the cabin crew trying to hide it than the actual smoking incident. In any instance, can the flight crew not abide by the same rules that they are asking the passengers to?

What right would the pilot have to enforce the no smoking in the lav policy if he/she could not keep from lighting up in the flight deck? How would the passengers take them seriously if they tried to enforce a different rule, but not this one?

I would also argue that nicotine is a mind altering drug, like caffeine, alcohol, or any of the other more mind altering catagories. Who is to say that nicotine is OK, but that the pilot cannot drink one glass of wine per hour while flying? After all, the liver metabolizes (roughly) one drink per hour in a healthy adult male. Why can't the pilot drink responsibly and yet keep flying? (Actually, I'm sure that some do!)