do you mean nargile? There are tons of nargile bars all over Beyoglu, and they are all of pretty similar quality. The tophane district down the hill is supposed to be the birthplace of the water pipe, so if you don't mind a walk, that's a good place for it too.
If you mean tobacco cigarette tobacco, I've found that most turks smoke american tobacco. The turkish brands are widely considered to be cheap and nasty. With that in mind, if you walk down from Istiklal to galata tower, or around the spice bazaar area, you'll see men with huge bales of shredded tobacco and rolling papers on the street, so that might be what you are looking for.
