Like, I get it - Smalls only recently got Denis Leary as a dad, he's super into Erector Set, and he apparently has no semblance of a social life beyond hanging out with his mom, Indiana Jones' Girlfriend. And, mainly, he doesn't know jack-squat about baseball. So how would he have heard of Babe Ruth?!
Let's put aside that Babe Ruth's legacy as the greatest baseball player ever had somehow missed Smalls, even though that's as insane as a kid growing up today not knowing who Michael Jordan is. Let's say that that's not IMPOSSIBLE. But it's REALLY REALLY improbable, and here's why - The Sandlot takes place in 1962.
1962 isn't that notable a year for Babe Ruth - he'd been dead for years (and giving dream-ghost advice to kids, apparently). However, the previous year - 1961 - was HUGE for Babe Ruth. It was the year Roger Maris broke Ruth's single-season home run record, and the news was EVERYWHERE. In order to not know who Babe Ruth was, we'd have to assume Smalls never looked at a newspaper, saw a TV, or listened to a radio for over a year.
As for s'mores...c'mon, Smalls. You're killing us.
They definitely had 98 cents to buy chaw with, and go to the fair with, and a million other things. Their whole lives revolve around playing baseball, and somehow they save their rainy day funds for buying s'mores, chaw, and fair tickets. And, as a result, almost lost a priceless baseball.
Speaking of...there were DEFINITELY other baseballs in Denis Leary's house, other than the CLEARLY IMPORTANT ONE SITTING ON THE MANTLE. Denis Leary attempts to play catch with Smalls early in the film with a regular ol' baseball (the one he beans him in the eye with), but Smalls doesn't think to use that one?
Also - pretty clear implication that Denis Leary is going to beat Smalls if he finds out the ball is missing, right?