I favor the owner of such private properties deciding what otherwise legal conduct is acceptable on his premises. I favor allowing patrons to choose whether or not to patronize such establishments.
The problem with that is if someone feels that they need the job and work in such an establishment and thus get exposed to whatever the health risks are. I'd imagine that if someone in such an establishment later developed a lung disease it would be interesting as far as compensation claims. The insurance premium might kill such an idea even where it would be legal.