Yes.

But if we lower the cost of maintaining that underclass, we gain.

Currently, we devote considerable resources to a variety of enforcement, emergency response and damage control measures, and at the same time we marginalize the productive potential of this underclass by forcing them underground, and tacitly promote a criminal trade in narcotics.

Part of the reason this narcotics problem has grown is that there will always be a criminal element.  When we drive that criminal out of (for example) the numbers racket, by creating government lotteries and casinos, they look for other lines of business to exploit.  So the hidden challenge in the type of transition being contemplated is in finding a more benign trade for criminal elements to apply themselves to. 

Those of us lucky enough to be able to control or compartmentalize our addictive tendencies would do well to look upon those who can't as fellow travellers with a problem.  Let's just manage the cost of helping them.