My first visit to Venice was in 2003, and the 2nd one just last year.
I never saw garbage in the canals. Perhaps the Venetians cleaned up their act since your visit, which was eons ago.
Now, the touristy aspect of the Marco Square and the Rialto Bridge is a fact of life, the same as any other landmarks such as the London Bridge, the Pisa Tower, etc...
Yeah I never noticed the smell, went several times.
First time was about 15-20 years ago. Wifi was relatively new at the time but I recall the place that I stayed in, which didn't offer Wifi, was over a restaurant which did have Wifi and in those days, nobody password-protected.
But I do recall that at night, they piled on garbage bags in some of the smaller squares, one near the Rialto bridge. I left early in the morning to go to the airport and it was still dark. I think I saw some of the largest rates I've ever seen.
However, they seem to have improved the garbage collection problem, now have bins which they seem to pick up several times during the day at least.
There's a documentary on PBS' Nova, it aired a couple of months ago about them trying to keep the water from flooding over the city. They have these giant gates in the lagoon but it takes hours to put them all up and they're meant only when they know there are huge flooding events coming.
They can't keep the gates up indefinitely. They need the waves from the Adriatic to come in and cycle the water out of the lagoon and the canals, because it's sewage from the city going into the canals and the water has to be cycled out.
A couple of years ago, I stayed at this nice apartment with direct views of the Grand Canal. Very modern or renovated too.
But in the middle of the summer there was a big rain storm and a couple of days, water pooled up in the alley where the building entrance was so there was a puddle which would enter the lobbies. They have these low gates on the outside of the doors to keep water out.
I would just take my shoes off and walk through the puddle to enter and exit the building.