I think modern darknet markets use smart contracts for escrow, so that you don't have to trust the escrow arbiter to not run off with your cryptocoins.
In your stated case, “smart contract” means software. It can’t verify that both sides of the transaction have met their obligations unless both obligations are on-chain, in which case there’s no added value.
It is a lot of work.
While for crypto-escrow you can just do a simple multi-sig with a hot keys that running on admin machines and they sign results there and they couldn't get the money, so no reason to try to hack the system.
Much easier setup.
That situation that it's avoiding is less of a concern with legitimate things where everyone knows who everyone is and law enforcement actually exists.