We played with that version. It is a very different weapon, more like a DoT (damage over time). It has its own virtues but it doesn't serve the same goal of rewarding you for tracking a target without being detected.
If you expressed the effectiveness of the smart pistol on a graph, where one axis is the effectiveness of the weapon and the other is player skill, you would find that at lower player skills, the smart pistol provides a large benefit, but at higher skills, it caps out almost completely and falls behind other weapons.
The "detected" version does not provide as big an effectiveness increase, because an aware player is much harder to keep under the reticle.