I didn't say smuggler have to be with the republic. I said they would never work for the empire. Only a stupid smuggler would take credits now from the empire only to get executed later after the empire wins. Bounty hunting is legal in the empire so it works for them. Smuggling by definition is illegal, and if you break the law in the empire you die, no chance to bribe a corrupt enforcer. Look at the smuggler in the trailer for the game, he is arrested by the jedi, if he crossed the empire they would just kill him. Credits mean nothing if you are dead.
A true smuggler values freedom, freedom to fly around and take jobs, both legal and illegal. That is not possible in the empire and only a short sided stupid smuggler would ever fight for them. See here:
http://www.hulu.com/firefly