The Dens Park side, sitting bottom of the SPL, 15 points behind St Mirren, parted company with the 39-year-old, who spent 11 years as a player with the Taysiders before succeeding Gordon Chisholm in 2010 after the club entered administration.
Dundee finished second to Ross County in last season's First Division and were only admitted to the top flight at the last moment at the expense of Rangers, who lost their place due to financial problems.
Lomas expressed sympathy for Smith, whom he claimed was treated like all players and managers, as a "commodity".
"I've been in the game for many a year," the former West Ham and Manchester City midfielder told Press Association Sport.
"People talk about loyalty and this, that and the other, but you are a commodity and when you are (thought) done, you are down the road, same as when you are a player. The only people who are loyal in the game these days are the fans, really.
"But I have a great deal of sympathy for Barry. To not know what league you are going to be in until the week before, how can you plan?
"That wasn't Dundee's fault, that was just the scenario but he went through two administrations (at the club), so let's have it right, he has been through the mill at Dundee.
"I thought he probably deserved the chance to be managing them next season and be judged on that, but whatever Dundee's thinking was, I have a great deal of sympathy for Barry because I don't believe he was given a fair crack. But I'm sure he will bounce back."