Before you answer, consider this: Phantasmal Forces is also a 2nd level spell. It can also create a fireworks display or an area of (illusory) thick smoke -- and a whole lot more. It does not require a fire source. It can potentially last longer. My reasoning is that Pyrotechnics has to be more than a mere pretty display, distraction, or obscuring cloud to be worth the effort of making a separate spell just for fireworks.
My theory is that there's a chance that a fireworks display could set fire to flammable material. Not a huge chance, maybe not over a large area if your fire source is a candle. Maybe have the caster make an attack roll against AC 9 for dry, highly flammable materials, AC 5 for large chunks of wood, AC 3 for stuff that can burn, but is hard to light. If the caster scores a hit, roll for "damage"; on 5+, a significant flame starts burning, otherwise it just smolders a little. Adjust this roll up or down based on conditions.
Also, there's a chance that a bright flash can blind onlookers. Have anyone with Con 3 to 12 roll a d6; they are blinded on a 5+.
A smoke cloud, similarly, should have a choking effect in addition to obscuring vision. The caster can roll 1d6, or 2d6 for large fire sources; everyone in the affected area whose Con is 3 to 12 rolls 1d6, and those whose score matches one of the caster's dice cough while in the cloud and are at half Move.
Oh, and let's not neglect the fact that there's no rule that says the caster must be holding the fire source, so it's a great way to extinguish the enemy's light source. In fact, it seems to be the only low-level spell that can extinguish a fire.