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History has shown that making something illegal that was once legal can result in many unintended consequences.

I presume you are referring to the ill-fated movement called “prohibition.” You are, indeed, correct in your observation if that is your basis.

History has also shown that making something that once was legal, legal again does not necessarily mean something is being encouraged.

I must disagree with this assessment if I understand your point correctly. While the degree of “encouragement” may be subject to debate, there can be no doubt, from a purely logical standpoint, that legalization of a previously illegal behavior is, in fact, an “encouragement,” to some degree, of that activity compared to its previous status.

To conclude otherwise is to give too much damn weight to one man's opinion and that is not a very good start upon which to build a body of core values.

Opinion, one man’s, or many men’s, for that matter, is not the issue. It is merely a matter of logic.

Libertarians are not alone in hypocrisy when it comes to living up to grandiose sounding guiding philosophies regarding the definition of "productive members of society".

Sorry, I am unsure of how the topic of hypocrisy came into the conversation. As to the definition of “productive member of society,” the term is intended to apply to those who contribute to the long term maintenance, growth or stability of a society in contrast to those members who make no long term contribution whatsoever or even a “negative contribution,” i.e., cost resources with no appreciable return, long term or otherwise.

-- there can be no doubt, from a purely logical standpoint, that legalization of a previously illegal behavior is, in fact, an "encouragement," to some degree, of that activity compared to its previous status.

You just agreed that history showed us that prohibition was "ill fated". -- History also shows us that repeal did not lead to any 'encouragement' of drinking.
-- If anything, our society today is discouraging drinking [in its public intoxication/DUI laws] far more than in the decades before prohibition or after repeal.

Flawed logic.

"Capitalism, unbridled, leads to monopolies which, in turn, strangle capitalism".

Monopolies are rarely formed without the collusion of Government. Regulating markets to prevent monopolies actually allows for monopolies to be formed.