But if the characters were in a dream state, what does smoke symbolize?
The smoke is a dream symbol for conflict-laden forces which are stronger, the closer, biting or more darkly the smoke is in the dream. It is a good sign if the smoke still resolves during the dream action or pulls. This points because to a relaxation of the dreaming or his conflict, a solution can be found. We should find out whether it concerns the grey-black smoke of a fire or the white-grey of a blazing fire. Smoke can symbolize in the dream also passion, even if it is not 'roused' maybe yet for a certain person. In addition, smoke stands at the same time for cleaning.
At the spiritual level the smoke in the dream is a symbol for the prayer or the victim which climbs to the sky. In addition, smoke can also show climbing the soul figuratively. This may be the process of cleansing the soul for its journey to the after life.
If everyone needs to be or become a smoke monster in order to clean up their sins, issues, emotional failings and burdens as a means of enlightenment and re-birth in the after life, the island could have been that proving ground. In the theme of light and dark, it is possible that the soul is split into two separate divisions, the dark side of the soul going to the island while the light side going to the sideways world. As such a person's aura gets two ways in which to see the bigger picture of life. The sideways world draws out the "goodness" in a person, while the island world draws out the bad. It is when a person true soul can come to terms with both the dark and light can it be re-awakened to continue its journey through eternity.
It would seem to be a personal redemption without a moral component. Most people have issues based upon environment, personality, disorders, relational and cultural factors that may bog down a person's achievements in their life. The separation of the darkness from the good is a means of purifying the spirit so one side does not dominate over the other. Balance, which is key in nature, is restored when the person is ready to accept themselves for whom they are.