Smith insists the decision changed the entire way Irish played the game - and that given the linesman was unsighted, a 'report' system would take pressure off referees to make game-changing decisions.
In league if a referee is not 100 per cent certain an offence is worthy of a red card, the player is put 'on report' and the incident is reviewed after the game.
The loss of Hala'ufia - who has a reputation of sailing close to the wind - may have changed the game but Smith is calling on his team to put their hands up and be more precise, after leaving 15 points out on the field in the 15-9 defeat at Welsh's new home at Oxford's Kassam Stadium.
"I think there's a lesson to learn from rugby league - I'm not saying we shouldn't have red cards if the referee is 100 per cent sure, but the time he took, and having to check with the touch judge, a report system would be much simpler," said Smith.
"I thought technically it was a perfect hit - the power of the impact meant the player bounced up and Chris followed through but the referees going to make the call.
"After that it wasn't rugby as we know it, the game turned to spaghetti. Because they've got a man up in the scrum they're scrumming for penalties, driving for penalties, we're defending trying not to concede them.
"It's fair to say I won't agree with the referee a lot of the time, and it didn't cost us the game - but if we'd played as well as we could have it would have been a gutsy victory. I'm not happy about it but we've got to crack on."
Gordon Ross kicked all 15 points for Welsh and had given them a 3-0 lead when Hala'ufia was controversially sent off.
The Scot added three more penalties to give the hosts a 12-6 lead at the break, with Tom Homer and Ian Humphreys replying for Irish.
Ross and Homer then traded penalties in the season half, but Irish also missed three shots at the posts.
The win lifted London Welsh 13 points clear of basement boys Sale and seven points in front of Irish.
And London Welsh head coach Lyn Jones compared the Hala'ufia incident with Wales skipper Sam Warburton's red card at last year's World Cup semi-final against France.
"It was a good tackle that turned into a suspect tackle," he admitted. "Sam Warbuton was penalised for a very similar challenge last year.
"I don't think there was any malice or intent, but sometimes the referee's hands are tied. It certainly changed the game, that's for certain."
Irish return to Amlin Cup action this Saturday when they host Gloucester at Madejski Stadium (3pm ko).
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