Since the infamous raid which cost the cops MILLIONS in compensation (not to mention setting their GLBT relationship back years) the Melbourne cops seem very hesitant to run a large scale raid.
There is however a strong undercover presence in many clubs - I think cops have genuinely realised (at least the ones who deal with it day in day out) that going for the end user isn't going to help, so they're focusing on spotting the dealers in the crowd.
IMHO the visual sight of dogs (in the streets, etc) is more a deterrant to keep users at home - ie off the streets with the 'general public' can see the problem, therefore the politicians can say they're winning the war on drugs.