Unless the CFI took the aircraft up with an engineer, s/he does not know what caused the smoke/steam anymore than you do. And shame on them for suggesting you might be a nervous flyer.
When you say 'ignition', can you be more specific - the ignition/start switch or a magneto?
Did the smoke/steam drift out or 'jet' out?
Was it a lot or a tiny amount, and how long did it last ?
My initial thought is an electrical fault in the switch, but electrical faults usually have a 'loud brown smell', as we say.