Did it go too far?

Yes, obviously.

The purported reason for the tax is to discourage people smoking. If the unintended effect is supporting criminals providing an unregulated product, then obviously the tax is not satisfying it's objective.

There's a point at which more tax is just more punishment for addicts.

It's similar to increasing interest rates to curb inflation, it's effective up to a point, but increases beyond that fail to control behavior.

Nicotine addiction is complex, like any form of substance abuse. The high taxes in Australia have done a great job of reducing the harm, but if we've reached the point where more tax doesn't reduce harm then we need to consider other measures.