Yes, she was clearly out of her depth with Paxman, and should have prepared better - especially after her earlier mess-up on Channel 4 News with Krishnan Guru-Murthy.
She also got confused over 'debt' and 'deficit' in May - unforgivable for a Treasury minister - so was never going to do well on a last-minute U-turn. Someone more experienced such as Michael Fallon should have been deployed instead.
Even though this was a clear own-goal, the reaction has been overblown and rather off-key. George Osborne has been accused of being a coward for not doing the interview himself. That is not quite fair. The Chancellor never does live interviews on Newsnight, so that was never an option. This was always going to be one for someone else - they just should not have picked Smith.
Paxman is a tough interrogator. That is fine, usually. But this time, he was clearly playing to the gallery (again), trying to repeat his infamous 1997 Michael Howard interview. He overstepped the mark when he asked Smith if she was 'incompetent' - that bordered on bullying.
Newsnight's viewing figures are now behind Channel 4 News (only 660,000 per night). I wonder whether the producers are resorting to pantomime tactics in order to grab audience attention?
Paxman's interviewees should give as good as they get. We all like to see the pantomime villain get his comeuppance. Smith would make an ideal principal boy, she just does not realise it.
But the PM should move Smith out of the Treasury and replace her with Matt Hancock - formerly Osborne's key adviser - as the Chancellor's alter ego on the airwaves.