Why do humans not have a powerful sense of smell?
Humans' poor sense of smell is a myth, borne of 19th century speculation rather than actual data. This is described in an excellent recent paper in Science , "Poor human olfaction is a 19th-century myth" by John P. McGann. Quoting from a recent blog post of mine,


  The myth dates to the work of the pioneering and hugely influential
  anatomist and anthropologist Paul Broca, who concluded that the
  relatively small olfactory bulbs in humans and other primates enabled
  the occupancy of this space by facilities of intelligence and even
  free will: “…it is no longer the sense of smell that guides the
  animal: it’s intelligence enlightened by all the senses… This is the
  cause of the atrophy of the olfactory apparatus of primates." This
  presumed “atrophy” and poor sense of smell however, were not based on
  any actual data on primates’ sense of smell! The myth propagated and
  expanded in the 20th century, becoming dogma. Back in the 19th, even
  Freud weighed in, noting that the lack of a strong sense of smell
  contributed, in humans compared to other animals, to sexual repression
  and mental disorders.


Humans, when trained, smell quite well, and can for example follow scent trails through grassy fields. Interestingly, the number of olfactory neurons is very similar in humans and other mammals (plotted in the aforementioned post).