Hey Abcsam,
First of all, DDs are not a dead class =). Second there are a few ways to be detected in smoke: hydro, radar and assured detection. Did you happen to notice if any of these were popping up?
When it comes to other players hitting you in smoke there are a few reasons this can happen:
Smoke is not a shield that will protect you from enemy shells/torpedoes.
If you are firing out of smoke, experienced players will see this and have learned to hit targets in the smoke.
If a ship with a high rate of fire is shooting at you they can spam the smoke with shells and hit you.
There is a "x" on your mini-map that some players have become adept at aiming with when a target goes undetected.
These are just some of the reasons why you might have been hit in smoke. Remember, some of our players have thousands of games under their belt and have learned the proper technique to shoot into smoke.
Tips:
Keep moving in your smoke while you shoot, this makes it harder for enemies to pick up where the shots originated from.
Make sure you are not sitting broadside in your smoke (this is a great torpedo target).
You don't always have to be shooting when you are in smoke, you can stop, re position and start firing again.
Always be aware of what ships are around you!
Hopefully this helps a little bit in understanding how players are hitting you in smoke, but when it comes to hacks/cheats we do take that seriously.