I could see the Reputation of the Socialist Party of America being tarnished by the way that they had reacted to the Rise of Featherston and the reports of the persecution of the Black-Confederates from before the war.
Al Smith’s reputation certainly suffers over the long term in TTL (although his death during the Second Great War somewhat mitigates this).
However, the prewar failures of the Smith Administration are not enough to permanently discredit the Socialists as a serious contender for the presidency (although, in TTL, due to a backlash against the prewar lack of military preparedness, among other factors, the Democrats do manage to hold power from 1945-1961).
In the long term, the Democrats, Socialists, and later the Republicans embrace a consensus that the USA should pursue a policy of permanent military preparedness (and that the USA should not, under any circumstances, offer massive territorial concessions to enemy countries).