How can I smile when I know existence itself is dukkha ?
Doctrine doesn't say that "existence is dukkha". See also:
In 7 Things the Buddha Never Said, Thanissaro Bhikkhu wrote (this is not a complete quote, I'm quoting selectively),
The phrase “Life is suffering” is supposed to be a summary of the Buddha’s first noble truth, but the first noble truth simply lists the things in life that constitute suffering: “Birth is stressful, aging is stressful, death is stressful; sorrow, lamentation, pain, distress, & despair are stressful; association with the unbeloved is stressful, separation from the loved is stressful, not getting what is wanted is stressful. In short, the five clinging-aggregates are stressful.” (Quotation from Samyutta Nikaya, The Grouped Discourses of the Buddha, 56.11)
Life, you’ll notice, isn’t on the list.
The other noble truths go on to show that there’s more to life than just suffering: There’s the origination of suffering, the cessation of suffering, and the path of practice leading to the cessation of suffering as well.
... the Buddha said simply that all fabricated things are impermanent. Anything perceived through the six senses is fabricated, in the sense that it is shaped by conditions, both external and internal.
However, there is something unfabricated that you can experience, and that’s nirvana. (See the Majjhima Nikaya the “Middle-Length Discourses” of the Buddha, 49, and the Samyutta Nikaya, the “Grouped Discourses of the Buddha,”43, for more.)
As the Buddha said, nirvana is the ultimate happiness (Dhammapada 203)—free from change, free from death, free from all limitations. That’s why he taught the path: so that people can find an unconditioned happiness.
... the Buddha actually said that people suffer because they identify with things that change. When the mind is strong enough that it doesn’t need to identify with anything, that’s when there’s no more suffering. On this point, see Samyutta Nikaya 22:1.
Can you smile when you are watching somebody getting tortured ?
I don't know. Is their smile intended as a form of communication in public, does it say something like, "Don't worry about me, I'm alright, you're alright with me", and so on?
If it isn't people "getting tortured", but rather, "torturing themselves", does a smile say something like, "you don't have to do that"?
That's the message which Thich Nhat Hanh took from the Buddha's smile in this story: "He was sitting on the grass, very peaceful, smiling. I was impressed. Around me, people were not like that, so I had the desire to be like him."
If you look at the Brahmaviharas as being:
... the right or ideal way of conduct towards living beings (sattesu samma patipatti) ... in fact, the answer to all situations arising from social contact
then perhaps the "right attitude" for you (or from you) towards these smiling monks is mudita -- i.e. sympathetic joy, joy at their accomplishments.
