all indications that she was misusing magic, and showing a lack of judgment with the power

What the others have said. There weren't any warnings that magic was addictive, as opposed to a power that could be abused.

The point where I was expecting some sort of magical backlash was in the episode where Buffy went back to see the first Watchers. Willow's trying to open a portal, and when the spell isn't working she just calls up raw power and demands that the powers obey her. I thought, "Honey, the universe does not appreciate being ordered around." I was surprised there wasn't some mystic backlash.

Again, the addiction angle didn't bother me so much as how it was handled. People having withdrawal shakes, getting back-alley magical hits and breaking into houses to steal sage were all just over the top and ridiculous. However, I agree it should have been setup much earlier if that was the route they were going to take, rather than the abuse of power angle they were doing up until that point.

just fixing Smashed and Wrecked would completely change the character of the entire Willow/Tara thing,

If I remember right, Smashed presents it as a power trip rather than... the other kind of trip. I liked that episode when it aired, which made Wrecked's awfulness that much more shocking.

One could say that Mutant Enemy was addicted to the power of allegory, leading to the car crash that was Wrecked. I mean, it starts out all right-- slaying the demons of high school; finding out your boyfriend is a monster-- but then you're making spells the equivalent of lesbian experimentation, parodying other shark jumps by inserting actual family members out of thin air-- and we know the rest.

breaking into houses to steal sage were all just over the top and ridiculous.

although it would have been really funny to watch some housewife making a nice pork roast be set upon in the kitchen by a sage junkie.

I hardly ever read the TwoP Buffy recaps, but I recall the hilarious one of "Wrecked" where Ace wrote:

At least we were spared a scene of Amy shakily pointing a gun at Buffy and screaming, "Where's the coriander, bitch?"

If "Beer Bad" hadn't already been done, "Magic Bad" might have been another way to go. Course it probably wouldn't take the season to the same place.

the magic = crack storyline

Another issue around this oh-so-awkwardly mishandled storyline is that if magic is suddenly evil, why is it okay for Tara and Giles to keep using it? Or the coven in England? (I know, I know, apparently because Willow now has a heretofore undiagnosed addictive personality.)

But by this point I was so disgruntled at Willow I wasn't cutting her much slack anyway. (Hi Buffy, glad you're back from the dead.... by the way, we've been living here in your house, and running through the money, just waiting for you to come back and take care of it all. You run along and get a job to support me, and my girlfriend. And you and Dawn too, of course. Me and Tara, both of us able-bodied adults, will continue to live here, but neither of us will even pretend to look for work, even part-time jobs...)

Season 6 made me snarl at the screen. Season 7 practically had me throwing things across the room.

Buffy totally should have started charging all the potentials' families for putting their girls up at a quirky SoCal "athletics-intensive boarding school." You know Kennedy's alone would have ponied up mid 5 figures.