The bans were a bit ridiculous, but there's probably not a heap to gain by fully lifting them now.
I may be way off the mark, but aside from the look it'll give CA, I also can't image that Smith and Bancroft would be in any sort of form or frame of mind to be unexpectedly pushed straight back into international cricket. Not to mention having to cope with the heavy scrutiny of the past, the decision to lift their bans early and the expectation for them (or Smith specifically) to carry an absolutely shithouse batting lineup.
Should they be allowed to play in the Shield though? IMO, yes.
As for Davey, happy for him to stay at home and watch cardoooons.