There was no drug war until about 90 years ago. But there were plenty of drugs readily available even right in the Sears and Roebuck cataloge (cocaine). Yet we had a smaller problem with drug use than now.
I submit that if people want to use drugs, they will. No matter if its legal or not. So I don't believe your premise that you INCREASE the motivation of users. Yes, the price is lower. But availability (if retail sales of drugs is still illegal) may be less than today because there's no big money to be made. So I believe that if done correctly, drug legalization can actually help the drug USE problem
Does legal booze keep people out of the bars? Last time I went, they were quite packed. Also, have you checked out any college campuses lately? Wanna know the most prevalent drug? The LEGAL one, Alcohol. Easy access, cheap, and fun for the whole frat.
You think that giving Phillips & Morris the job of supplying Cocaine or Heroin that they won't make BIG money? What are you smoking?