I wonder how much money they could save by spending on drug rehab centers and other social services. Almost no one starts taking drugs for the hell of it, they do it to fix a problem in their lives, it'd be far better to treat the reason why people take drugs than to keep beating them down while scratching their heads trying to figure out why there is still a drug problem...
Hell, Silk Road is probably reducing crime as most violent drug-related crimes occur at the 'retail' level (distribution to the street level dealers, disputes with other street-level merchants over territory, and disputes between dealers and customers). Such issues that do not appear with Silk Road.