Eventually pollution makes the price well-felt; look at the color of the sky over China's largest cities, or read about vendors of canned oxygen on the streets of Tokyo in 1970s.
You are making a dicotomy falacy with more than two options: it's either "quality of life + smog" or "being poor + clean air". There are two more options: "being poor + smog" and "quality of life + clean air".
Some 50 years ago there was no option to coal as the first source of (cheap) energy. Today you can go straight to solar and wind as a cheap energy source, unless you live on a massive oil/gas/coal field, and that's the choice of "quality of life + clean air" you dismissed.
Certainly coal-fired power stations are better than no electric power at all. They just have pretty visible cost in quality of life: they improve some aspects, but worsen others. As basically everything in life, it's a balancing act.