I have been using iTunes and iOS devices to listen to podcasts since long before they where actually iOS devices (iPod 2nd gen.)
I can say that the various versions of iTunes support for podcasts alternates between broken for something, then they fix it, then they break something else, then maybe that gets fixed and something else gets broken.
Over the last few years getting smart playlists to sort correctly has alternated between being always most recent, always oldest and what you actually asked for.
Since they actually finally got that working correctly one or two revs back (iOS 5?) it was about time for they to royally screw things up again.
In theory a separate (from iTunes) Podcast app that managed your playlists, fetched podcasts itself, supported playlists etc, sync'd everything through the cloud so that you can listen on your various iDevices, and had good support for deleting them (select auto-delete, manual-delete, etc for each separate podcast) would be a good idea.
Unfortunately that's not what the current Podcast app is. And for better or worse the Music app does a reasonable job if left alone. Although I expect we'll all be up in arms again to revisit this theme in October when the new iTunes version 11 comes out.