There's no question that Josh Smith would be an upgrade for the Nets frontline. He would give the Nets a good interior scoring option and a much needed defensive presence.
The Nets have deep pockets and can promise him a new contract in line with his expectations and that may give the team an advantage. If Smith tells the Suns and Bucks that he won't re-sign with them, they may be reluctant to trade for him. The major thing, though, is that Monta Ellis is also a free agent to be and if he's not traded, the Bucks may lose him for nothing, just like the Hawks may lose Smith for nothing.
For that reason, an Ellis for Smith trade may make sense for both teams, even if neither Ellis nor Smith decides to sign a new deal with either team.
Nets fans should definitely keep their fingers crossed for Smith, though, he would certainly give the Nets an even better chance of catching the Knicks for the division lead.