I think you're wrong.

"Smiths" may be a collection of individuals, but a band name is a proprt noun like the name of a person or a city. You wouldn't say "Mike are great" or "London are the best city."

It sounds a bit off, but I think it's correct.

You might want to check your references before lumping together a whole group of citizens. That image is one that Morrissey wore on a t-shirt not long after the split of The Smiths but it read “smiths is dead”. It was probably meant as a pun by the designer of the flyer to change “dead” to “alive”. I don't believe they were going for proper grammar...probably just using an image known to most fans. If I remember correctly, the picture of Moz wearing the t-shirt is in Peepholism or whatever it’s called...I’m not greatest speller.