While I agree with most of your post, keep in mind Richard A. Clarke was the National Coordinator for Security and the chief counter-terrorism adviser on the National Security Council for something like 30 years. He may know a little bit about what he's talking about.
By the way, he wrote a really good book called Against All Enemies, a good look at his perspective during the rise of al Qaeda. A thoroughly interesting read.
'Ain't Nobody's Business If You Do' by Peter McWilliams covers the effects of legalizing drugs in great detail. It also covers the social ramifications of legislating victimless crimes.
http://www.mcwilliams.com/books/books/aint/303a.htm