Nicotine is a bio-hazard. According to the Wikipedia entry for nicotine, "spilling an extremely high concentration of nicotine onto the skin can result in intoxication or even death since nicotine readily passes into the bloodstream from dermal contact."
That's why cleaning a contaminated machine involves a lot of time, effort, material, and preparation. Isopropyl alcohol is the most effective agent for removing it, and it takes a lot of alcohol. You end up with a poisonous mess, not to mention the filth that's attracted to it.
It is a nasty job, and it has the potential to make the technician performing it ill.
The decision to void a covered machine is on a literal case-by-case basis. If I can attribute a machine's failure to something other than the smoke, I'll do it. And I'd definitely charge the customer for the cleaning. And if I refuse to repair a covered machine because it's filthy, maybe another technician would agree to do it. But Apple doesn't require anyone to jeopardize their health and well-being to clean a filthy machine.