I don't think it's crazy that Smith could be better utilized by NE to get to the Top 5 . . . the issue will be can he stay healthy enough to even have a chance. Smith scored 140 points in PPR leagues last year on only 65 targets. Before he got dinged in camp, NE was getting creative on getting him the football, running sweeps, pitch plays, TE screens, and at one point even running a draw with him lined up in the backfield. The #5 TE last year scored 175 points.
Given that NE shelled out $50 million with $31.25 million of it guaranteed, I think it's a safe bet to conclude that the Patriots plan on using him more than the Titans did. The switch to Jones likely will equate to more team passing attempts and possibly more red zone passes (compared to how things would be with Newton trying to run the ball into the end zone all the time).
Smith could (not saying will) see a 40-50% increases in targets this year. I realize fantasy points and targets are different creatures and don't always change equally (he's not jumping from 9 to 13 TDs), but 35 points would only be a 25% jump in scoring.
Put another way, Smith scored 354.4 fantasy points on 169 targets in his time with the Titans. That's 2.1 fantasy points per target in PPR leagues. Mike Clay has Smith projected for 90 targets this year. At the same scoring rate over his 4-year career, that would yield 189 fantasy points . . . or 178 points in a 16 game season based on 90 targets. Which, by the way, would have been at the #5 TE production level last season.
My point being, at the same production rate as in TEN, Smith would just need the targets to rank that high. IMO, he will be more featured in the NE offense than he was in TEN (ie, the more targets part), and I think he might do slightly better production wise (although probably with fewer TD).
So to me at least, Smith makes an excellent Top 5-ish TE candidate. Given that his ADP is currently TE14 / 132nd overall, I would have no qualms waiting on TE, filling my roster at other spots, and then taking Smith and expect decent numbers from him.