Should SMD footprints be rounded?
Yes, SMD footprints should have rounded corners as per IPC-7351A

Corner radius is 25% of the shorter side of the pad but not more than 0.25mm (10mil which is not exactly the same but close enough here)

Why?
The corners do not add anything useful (no additional adhesion, no additional stability or conductivity). But on reflow soldering the solder does not always flow into every corner possibly leaving copper exposed.
Additionally: it's better to have stencils with rounded corners.

The only reason for pads with edges was that some tools did not support rounded edges.

Addition: no, pads with reasonably rounded corners do not have to be bigger because the corners didn't add anything useful to begin with.