"We are deeply saddened and angry at the outcome of the Bakkies Botha appeal. We have to hope and pray that it is purely victimisation of Bakkies and not the way the game is going," said Smit.
"If it is not victimisation of Bakkies, and the hard way he plays the game, then a ruling like this could change this wonderful game we have for good. That's a great concern for us - the players aren't happy and will stand together on this point.
"I have to believe he has been victimised. If he has been found guilty of something that's not a part of the game then we can take 15-20 clips out of every Test match played and ban every player who has cleaned out a ruck.
"I have to hope and pray it is victimisation, otherwise this game is going in the wrong direction."
Botha was cited for driving into a ruck four minutes into the second half of last weekend's second Test in Pretoria in an incident that caused Lions prop Adam Jones to dislocate his right shoulder. The Springbok lock was given a two week ban which he appealed against.
But on Thursday the IRB appeals committee ruled out the appeal and Botha will miss this weekend's third Test as a result - leaving he Springboks, as well as many other players and referees around the world, very angry and concerned.
"Sanity hasn't prevailed in the appeal. We have had referees calling us and saying it is an issue we need to stand up for," revealed Smit in his captain's press conference on the eve of the third Test.
"To let something like this pass is setting a precedent that could ruin the game from a ruck point of view. I have had support from the Lions management and players, as well as from players I have played with and against from around the world, saying it is ludicrous and we have to hope that if sanity hasn't prevailed this week it will in the future.
"Rugby union is unique because it is a contact sport in which men and women throw themselves into rucks, tackle hard and run with the ball as fast as they can. When Bryan Habana is running as fast as a Cheetah down the wing you don't want him to slow down just in case the player he is running into might get hurt.
"That's the nature of the game and there is a fine balance. A ruling has been made on Bakkies even though he went into the ruck from behind the gate, with his arms bound without a shoulder charge.
"It was unfortunate that Adam Jones got injured, but that was because his arm was stuck in a ruck. You have to look at the incident a fraction of a second after Bakkies cleaned out Adam and Matthew Rees came in and cleaned out Bakkies.
"We couldn't be unhappy with that because it is the nature of the game. This ruling does create a scary scenario for the future of the game."