Yes, you should use your shadow gear for Smite dps. As much as I'd like to see Smite viable in raids, it's current damage numbers are simply not on par with all the other dps specs to even be remotely considered competitive. It is a fun spec for enjoyment when conditions are favourable such that you will not burden your raid members with lower than usual dps numbers. Thus, if situation requires, your gear should allow you to switch to Shadow at anytime for more serious/tougher encounters.
Aside from that, I have browsed through the current Tier 10 Shadow gear. Ignoring the set bonuses, the Haste/Crit/Hit stats on those tier pieces are quite nice for Smite priests. The lack of Spirit on those pieces is most unfortunate. But overall, they are definitely worth the badges.
As for Haste, here are the numbers:
32.79 Haste Rating = 1% Haste
You are required to have 50.00% Haste to get your GCD to 1 sec. (1 sec Holy Fire) That's 1638.84 Haste Rating...which is a lot, BUT -
Enlightenment - 6% Haste
Wrath of Air (Shaman) - 5% Haste
Improved Moonkin Aura (Druid) / Swift Retribution (Paladin) - 3% Haste
Druid and Paladin buff do not stack with each other, so in total, including talents, you should have 14.64% Haste by default in a 25 man raid environment.
(1.06 x 1.05 x 1.03 = 1.1464)
The remaining 30.84% must be obtained from gear, that's 1011 Haste Ratings.
Chardev gives a pretty good idea about gear stats. At 10-man top tier non-heroic level, if you gem for pure Haste, you can reach approximately 800 Haste Ratings. But this will gimp your crit and spellpower, not to mention massive regen. Using 25-man gear, you can reach 1011 Haste Ratings, but again, at the cost of other stats (most specifically, spellpower), so it doesn't really translate into better dps output.
So what Haste Rating should we aim for? To be perfectly honest, the more the better, but there really isn't a solid cap to reach besides 214 Haste Rating + 3/3 Enlightnment for Holy Fire -> Smite x 4 Rotation. Holy Fire cooldown really messes up the Smite rotation. You are quite right about reaching the 1 sec GCD been impossible at this point. Sadly, the Haste Rating required is a little higher than 750. 946 Haste Rating will get your Smite casting time to 1.3 sec and Holy Fire to 1.04 sec. It's just about enough to fit SW: Pain, Devouring Plague, and Mind Blast into the 3 sec during in between Holy Fire cooldowns. If you raid 25-man as shadow, 946 might be obtainable. Play around with Chardev to set up your gear wishlist and see which setup is right for you.
Gem Choice Overview:
Chaotic Skyflare Diamond
+21 Critical Strike Rating and 3% Increased Critical Damage
Insightful Earthsiege Diamond*
+21 Intellect and Chance to Restore Mana on Spellcast
Runed Cardinal Ruby [Red]
+23 Spell Power
Purified Dreadstone [Purple]*
+12 Spell Power and +10 Spirit
Seer's Eye of Zul [Green]*
+10 Intellect and +10 Spirit
Intricate Eye of Zul [Green]
+10 Haste Rating and +10 Spirit
Misty Eye of Zul [Green]
+10 Critical Strike Rating and +10 Spirit
Reckless Ametrine [Orange]
+12 Spell Power and +10 Haste Rating
Luminous Ametrine [Orange]*
+12 Spell Power and +10 Intellect
Potent Ametrine [Orange]
+12 Spell Power and +10 Critical Strike Rating
Veiled Ametrine [Orange]
+12 Spell Power and +10 Hit Rating
Quick King's Amber [Yellow]
+20 Haste Rating
Bold gems are my personal preference. Non-essential gems are not listed. Gems marked with [*] are alternatives if you have mana sustainability issues.
Of all the stats, spellpower will give you the most increase in DPS. Therefore, you should always socket spellpower wherever possible. This means gemming for raw stats such as + 20 crit/haste/intel/spirit are not recommended. Do not gem for spell hit rating, that should be obtained from gear.
Crit stats are usually coupled with hit on most dps gear, therefore they are quite easy to obtain at this point in the game. Armor enchants involving spellpower also comes with crit. Therefore, you shouldn't need to gem specifically for crit if you surpass 30% Holy Crit unbuffed.
12sp/10 spirit gem will give you the highest spellpower boost besides 23sp runed ruby. You need at least two of these in your gear to fulfill meta requirement. 10 spirit might seem trivial, but 25% of your spirit are converted into spellpower via talent. The status is also buffed by Mark of the Wild and Blessing of Kings, not to mention giving you more mana regen.
12sp/10 intel is your prime regen gem. Intel is the king stats for Wotlk regen. It works insanely well with Replenishment. Furthermore, Intel gives you a little bit of crit, a bigger mana pool (more pew pew time), and is boosted by Priest's talent and raid buffs.
Going back to the topic of Haste, 12sp/10 haste is the gem to use for all your yellow sockets if you crave Haste. Besides that, it should be obtained from gear once you reach the hit cap and has a healthy amount of crit.
To conclude, there are always other ways to boost your dps. I use the trinket trick.
Priests are equipped with their own heroism cooldown ie Power Infusion. Smite rotation also contains a nuke period. When Holy Fire DoT is running, our dps is at its peak. When the DoT drops our damage is reduced for a short 3 seconds. Therefore, if you were to use trinkets that are of the type "You have a chance to increase your spellpower by xx for xx sec" on a 45 sec RNG cooldown, it might not be used efficiently.
The trinkets that are ideal for Smite priests are of the kind that says "Use: Increase your spellpower by xx for xx sec". We can control how we use these trinkets. Power Infusion has a very short cooldown, so by using PI, Holy Fire DoT and the trinket at the same time, we can increase our damage output by a mile. No other class has this flexibility, so try this out.