I agree that smite evil IS evil now but I'm not sure that it's unbalancing.
First of all compared to a fighters new weapon group attack and damage bonus it's quite comparable, a fighter gets those bonuses all the time and is free to dump all of his resources into strength whereas a paladin needs to split his efforts into several different stats. It looks to me that a fighter will hit more often than a smiting paladin (which means comparable damage from more hits).
I also feel that as far as the DR is concerned it would only matter at low levels that a paladin can ignore DR and at low levels DR is lower so ignoring it has less impact. At high levels melee is almost pointless, if a paladin decides to smite some big baddie then the enemy caster can just maze the paladin away or block him with a wall of force or any number of things. So good for the paladin if he gets a round of smiting in, cause he's going bye-bye in the next couple of actions.
also, the "group" smite evil says that it affects all the paladins allies does that mean the paladin himself is NOT affected, if so that is kind of an interesting moral dilemma for a paladin, to use smite for himself and get all the glory or do the smart thing to defeat the evil creature and give all his allies the power to defeat the creature.