It is not at all uncommon for a wallwart to create more then rated output current.
The current is rated for nominal voltage and ripple at that current.
You can draw more current with reduced voltage and increased ripple and I have done so but it may cause the transformer to develop shorted turns (which causes overheating) if you do it for long periods of time.
As lefty suggested, test your Arduino pins with resistors and LEDS but I think the smoke was just the transistor so very little harm done.