Most inkjet output for photos, especially on photo papers are capable of much more color than sRGB, so is the limitation within SmugMug for sRGB for status quo or based on limitations of the output services partnered with ?
Only a few browsers these days are color managed and actually recognize and respond to an image's color space. If you try to view an image that is not in sRGB (like AdobeRGB or ProPhotoRGB) in a non-color-aware browser, the colors will look absolutely horrible. So ... if you want decent display of images in non-color-aware browsers like IE and Chrome, then the image has to be in sRGB.
So, from this one can conclude that if you want decent color display across the popular browsers and you are displaying the same image to every browser, you have to display sRGB images. So, if you have to display sRGB images, the simplest scheme is to just require that all images that are uploaded be sRGB images.
There are more complicated schemes that allow upload of larger color space images and they are served up to browsers that are color managed, but sRGB conversions are served up to browsers that are not. With some complication, perhaps that could be done, but that isn't the way Smugmug works.
Why sRGB? For consistency throughout.
Some web browsers are still not color-aware making it impossible to accurately represent photos in colorspaces outside of sRGB to all people. Browsers that are not color aware 'assume' images are in sRGB. Consistency, and accuracy of representation are extremely important to photographers.
Most commercial labs require sRGB. While Giclee output can mix colors to produce a wider gamut, digital labs use a type of chromogenic process for most products that most closely fits the sRGB colorspace. Submitting files in colorspaces other than sRGB would not result in a wider gamut, but force color substitutions to conform to the capabilities of their chromogenic processes, resulting in colors being less accurate without 'more' colors.