Keep the AOE effect, perhaps make the radius smaller and more visible. Make it deal damage to enemy and friendly units alike, chipping away their health, creating AOE denial area. Thoughts?
I suggested for the LA changing the smoke grenade to "burst" into a cloud of smoke instead of slowly turning into one, and make it so they would cause people caught in the blast to have jump COF and can't ADS. I think this would work for the medic though. Let you disable an enemy so you can revive your allies.
Yes, brilliant. . . because that crap with friendly fire would most certainly be a very good thing, right? RIIIIIGHT????
No. That would be incredibly OP. I can only imagine the amount of QQ that would result if this became a thing. Point holds would become literally impossible. Why bother wasting resources on a MAX crash when you could just spam gas grenades through a window and kill everybody without putting yourself in harm's way? EMPs and frags are already bad enough as is. Gas grenades are a terrible idea and would not work well in Planetside.
Here's an idea: Nanite Parasitic Shield Grenades. They leech the energy from enemy shields. Think "Reverse Medic Shield Generator" grenades, but with no destructible beacon and only the radius of the rank 1 shield beacon. (Though with a powerful drain speed to force an immediate reaction and a decent field duration time to ensure it has the intended temporary area-of-denial effect.) Make them detonate on impact to prevent throwing them around corners without the enemy getting a warning, but at the same time it's essentially a slower, non-lethal "restricted area" grenade. Lastly, double the cost to the mid-range grenade cost of 50 nanites (twice that of EMP grenades, just to give that some perspective) to cut down on spamability. This gives it a relatively small AOE, but if the enemy is hunkered in a strategic corner or something this will force all but the Maxes to move to a new strategic location (most likely in the immediate area). Less immediate rewards (you won't be getting any kills with them) over standard grenades, but significantly more emphasis on the "Please vacate the premises" power that most grenades carry. (Oh, and they should give their own kind of bonus on top of the assist bonus for enemy kills while their shields are still damaged by your grenade field.)
As a MAG gas grenade expert I approve. Although it doesn't need to be on Medic class but probably LA to give them more team utility.