Uh, what's wrong with just telling them that no smoking is permitted? How about reporting it to a person of authority? Seems to me a bit extreme, and if there are any physical effects of the extinguisher, it could be a law-suit waiting to happen. In a public restroom, like getting it in the eyes, I doubt the owner of the establishment would appreciate it being used for this purpose (unless the guy using it is the owner). Who's responsible for cleaning up the mess?
I'm sure this is every non-smokers dream, but in reality, I don't think it's a good idea.