I suspect that one of the core reasons that Smith was not treated very well by the British government was personal. Smith made the mistake of befriending the estranged wife of the Prince Regent, Princess Caroline, and was widely believed to have been her lover. When there was an investigation of the wife's behavior (had a baby not by the Prince Regent) Smith's name came up. See "A Thirst for Glory" by Pocock. Nothing came of it regarding Smith but something like that would be just the sort of thing that would have motivated the Prince Regent to deny Smith his full recognition.
The knowledge of Smith's less than full recognition was well known and wide spread. See Installation at Oxford, a letter [signed E.H.H.] to sir William Sidney Smith . https://books.google.com/books?id=k-oHAAAAQAAJ&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false
It took the young Queen Victoria in 1838 to finally grant Smith the Grand Cross of the Order of the Bath.