In addition to what Doug mentioned, searing also develops flavor from caramelization of the surface of the roast. I do this for some chuck roasts that will be smoked for a while then finished with liquids in a braise. Though I do chucks at high heat which affords some caramelization, I sometimes sear first (often unrubbed, depending on rub ingredients; I rub after searing if I didn't rub before) so that the liquids will take on deeper flavors during the braising phase.
As Doug also notes, smoke does not appreciably penetrate nor does searing 'seal' meat. Searing actually results in a net moisture loss but this loss in negligible in most cases.