(FORTUNE Magazine) – April 1 was the day the Senate Commerce Committee voted, 19 to 1, in favor of tough new tobacco legislation, and for the tobacco industry it must have felt like a really bad April Fools' joke. Having negotiated a landmark $365 billion settlement with the nation's attorneys general last summer--a deal that, among other important things, would have traded litigation relief for a ban on most cigarette advertising--the industry could only watch in dismay as the committee tore that settlement to shreds.

The bill being offered in its place would raise the industry's payments to more than $500 billion, hike the cost of cigarettes, impose new penalties if teen smoking doesn't drop, give the FDA regulatory authority over tobacco, and place limits on advertising. All of which Big Tobacco could live with if it got litigation relief in return--but much of that is now gone. Although the bill calls for a $6.5 billion cap on the annual amount the industry has to pay out to litigants, it still allows suits by just about anybody who ever inhaled a puff of smoke.

If your first instinct is to chortle with satisfaction, you can hardly be blamed. After decades of denying the undeniable, the tobacco industry is finally getting its comeuppance. Yet there is something awfully troubling about the way Congress is going about the business of rewriting the tobacco settlement. The legislation has less to do with creating sound public policy than with exacting revenge. And revenge almost never leads to good public policy.

Sensible tobacco legislation should embody two goals. The first--the goal everyone acknowledges--is to keep teenagers from smoking. The second goal--which no one acknowledges--should be to ensure that the tobacco industry survives. To be blunt, the only way the industry will be able to pay the pots of money everybody wants from it is by continuing to sell cigarettes. No one in the anti-tobacco camp wants to admit that, but it's true. In addition, selling cigarettes is still a legal activity. However much Americans might loathe the industry right now, the country simply is not willing to prohibit smoking. Given that fact, the antis should be trying to figure out what the tobacco industry will look like once the dust has settled.

Yet the thirst for revenge has obscured those goals. Take David Kessler, the former FDA chairman whose vocal opposition to the original settlement had a lot to do with shaping the current bill. "There should be no concessions to this industry," Kessler often says. He points to documents, in which the tobacco companies are shown to have targeted teen smokers, as proof that the industry doesn't deserve leniency. Is there any doubt that he seeks revenge? Another tobacco foe, Luanne Nyborg of the Minnesota attorney general's office, told a recent anti-tobacco conference, "We don't think they deserve immunity. We don't see why they should be given any protections at all."

If the industry doesn't get immunity--regardless of what it "deserves"--how will this further the goal of reducing teen smoking? The answer is: it won't. In the first place, it is extremely unlikely that the courts will uphold any advertising restrictions that the industry does not voluntarily agree to. Though such restrictions are key to reducing smoking, they also violate the First Amendment. Yet if the industry doesn't get litigation relief, what incentive would it have to agree to the restrictions?

Second, now that Big Tobacco has become a juicy target for the plaintiffs bar, it is only a matter of time before it is buried in lawsuits. In which case, tobacco companies are likely to do what Dow Corning did in the wake of all the breast-implant litigation--file for bankruptcy. Bankruptcy would put a halt not just to litigation but also to most of the payments Congress now hopes to get from the industry.

The larger point, though, is this: what purpose is served by letting smokers sue the tobacco companies into oblivion? The honest answer is that it serves merely to punish--to exact revenge well into the next century. Given the degree to which the anti-tobacco forces hate the industry, they may well be hoping that lawsuits can do what they can't do through politics: cripple the industry forever. But in addition to being a gutless, backdoor way to do business, it also doesn't do anything to move us toward a rational tobacco policy in the here and now.

There are times when achieving something important requires rising above the desire for revenge. That's what the U.S. did after World War II, when it rebuilt its former enemies. And that's what we need to do now with tobacco. Yes, the industry has done plenty of things it should be ashamed of; even Philip Morris CEO Geoffrey Bible has admitted as much. But if we're serious about solving our tobacco problem, we need to reach an accommodation with Big Tobacco. That such an accommodation has to include litigation relief seems obvious. Does anyone have the political courage to say so out loud?