Why did a moral god kill Nadad & Abihu?

[Brakeman]

(3) Why would he kill his worshipers for using the "wrong" fire, yet let Joe Smith of the mormons peer through rocks to divine his message?

Because those two in lev 10 established the high standards God demands for worship without the attoning Grace offered by the blood of Christ. Smitty took avantage of the same grace offered by Christ to those who try and worship Him with all of their being. Christ told us that He would allow the wheat (believers) and Weeds (people who may look like wheat but are not) to grow along side each other, until the final judgement.

It is after this judgement that men like that will experience the 'holy fire' these two men did in lev 10.

From the story, one can find no motive for Nadad and Abihu to have intentionally broken god's commandment. They did not have anything to gain from one worship ritual to the next. Their own "god equal" sense of right and wrong was not triggered by the mistake.
Joe Smith on the other hand knew he was a lying con artist and knew what he had to personally gain from his actions. The two stories are not morally equivalent and do not merit the same punishment.

God's punishment in the old testament was also capricious. God did not smite everyone in the old testament that was not perfectly righteous, let alone those of his own flock that went against him. Moses was not smitten, he just couldn't live in his promised land. Couldn't god have been satisfied with just a smaller punishment for the two priests?

If your child made a mistake, you might punish them, in order to direct them on the right path, but you wouldn't kill them I hope.
Why would god think that Nada and Abihu were completely irredeemable even with the magic rehabilitative power of god?

Sure, jesus came along later and changed the rules, but that was much too late for Nadad and Abihu. It doesn't apply to them.