Agreed. I think we need to see a slow readjustment of policy while carefully assessing the impact on society. Start out with the basic HR stuff, more education, less scare tactics, shooting centres, remove dogs from festivals, encourage pill testing etc.
Once people realise that they sky won't fall if we don't demonize drugs, take further steps. Decriminalize personal use quantities, maybe legalize weed. Then slowly assess the changes caused by the legalization of different drugs and work towards whatever ends up with the least harm to society as a whole (including the users).
I think there's an optimal middle ground. The system we have now obviously doesn't work, but I think free for all legalization would have disastrous results, particularly in regards to certain chemicals.