Yes. In fact, it was allowed in every studio I worked in during my first round in radio (1971-1981). By the time I came back from my 30-year-detour in TV news, no....that allowed smoking inside the studio?
If it wasn't allowed, did people do it anyway?

A smart manage knew something was going on that warranted night and weekend unannounced visits when editing single-edge blades were reordered after just three months.and the razor blades from the editing area ...well they had other uses too
At one of my first stations, 4 or 5 of the jocks smoked. One had good pipes and was convinced that smoking made him sound even better. A few of the guys there with lighter voices were convinced that smoking made them sound better on the air and liked the "raspiness" that it added. I remember working overnights one weekend, a 2 hour block of that shift was pre-recorded programming on vynil with local inserts every 15 minutes. I got bored and decided to clean the board in the production studio - Basically just removing the old, crappy looking labels, spraying 409 or Windex on a paper towel and cleaning the gunk off all the exterior surfaces and then re-labeling. It ended up taking me a few hours and the amount of gunk and brown/grey discoloration on all the paper towels I'd used was impressive! Then again, before I cleaned it up, it'd probably been years since it'd been done.Back in those days of radio you were the odd man out if you didn't smoke. In fact, at my first fulltime gig, I was the only person except for the traffic person that did not smoke. Every staff member, including sales, office and jock smoked. This included the 16 year old high schooler with a weekend shift. As a matter of fact, I picked up smoking again after about a month there.
It was common to find cigarette ashes on the microphone and the control board. TV and Radio hosts were often seen smoking on the air. Nothing unusual about it in that era...Many thought the Shure SM5B windscreens were brown. They were gray.
Since, exactly as you say, smoking really was "everywhere", it may have been considered an oddity back then to ban it, and jocks may have put up a fight had they tried to prohibit smoking in the studios - Especially since, as someone correctly stated earlier in this thread, many employees at many stations - airstaff, engineering, clerical, managerial, executive - were all puffing away inside the facility.Thanks for the interesting responses. I know that smoking was an "everywhere" thing decades ago, but these equipment horror stories are exactly the reason why I assumed it would have been banned in-studio.
...that allowed smoking inside the studio?