What you said was true. SAD is a chemical compound that only CC knows how to produce. Dofla owns a factory that can turn SAD into smiles, artificial zoan devil fruit.I think stopping SAD production would prevent Kaidou and possibly other yonkou from getting stronger. As long as SAD continues to be made, whoever gets it will get stronger. Law likely aimed to prevent the customers from getting stronger.
of course, I forgot what SAD is. I keep thinking it makes devil fruit. :\ If that's true, then I stick by with what I said.
And yes, eliminating smiles ensures Kaido can not get stronger. As long as he has access to smiles his army of devil fruit users can continue to grow exponentially. Law's plan has to do more than keep him from getting stronger though, it must also weaken him. Kaido is still a Yonkou, even if he can't get stronger, he's still more than Luffy and Law can handle as things are now. In a sense those who complain about power levels are correct. The Marine needed a war to defeat Whitebeard. The next phases of Law's plan must not only prevent Kaido from becoming stronger, but actively weaken his position. Eliminating allies, seizing territory. Something like that.
Wouldn't it be interesting if smiles only temporarily grant df powers? Maybe unlike real df, the powers are not absorbed into the dna (or w/e), and don't become permanent. Losing Smiles would be a real blow then. Not only could he not increase the size of his army, but without more fruit his troops will lose their powers. Probably not, but it would be an interesting twist.