Wow, what dealer is that? I've bought a few cars from MB/Smart of L.N. and never had a problem with license plate holes. They actually ask you when you buy if you want holes or not and if you say no holes, they make you sign saying you understand that it's illegal. I would have them give you a bumper in exchange.
Illegal is overrated, people violate the law all around me in ways that may effect me, talking on cell phones with no hands free device, speeding, rolling through stop signs, making right on red without regards to traffic, it's a scary world on So Cal freeways, the least of my worries is a guy that loves his car so much he doesn't want to cover the front with a plate. Besides, I ride motorcycles and you only get one plate, so why have a double standard where it's not allowed for motorcycles to have front plates and mandatory for cars. Afterall, my motorcycle is far more capable of exceeding speed limits and breaking the law than any car I own, let alone the Smart.