His great progression hit an absolute halt this season. You can see it stylistically in his play also -- if you watch Smalling in his earlier seasons contrasted to now, he was nowhere near this rash. He was all about using his pace, standing tackle and generally intercepting play before he needed to dive in or grab an opponent. I feel like now that he has senses of his own strength and pace, he has become innately lazy and just 'Srktel-shoves', or pushes really close to his forward to intercept quickly because he knows it's unlikely the striker will turn him and win a footrace.
As a result, he's sort of reached a plateau in his abilities, yet I think he's too 'matured' in this style to go back. As a result, I see him as a very good first team option - his aerial ability isn't matched by many.
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FWIW, his current standing has significantly lessened in fans minds down to vilification from his manager - it has become commonplace to see him as this wuss who doesn't want to give it all for the team etc. despite playing the most outfield games for us last season.
At the risk of sounding a bit crackpot, I think he has definitely played through an injury or two down to the above, and that is affecting his performance levels. We know that for a fact against Chelsea earlier this season, for instance.