While I believe sweeping legalization of all presently banned drugs would be a bad idea because it would occur as a traumatic transition and if the effect were severely negative it would be difficult to regain control. A much better approach to weaning away from the existing brute force drug war would be to decriminalize marijuana. Then, when the public becomes accustomed to that level of relaxation, establish regulations for production and distribution to adults according to the existing liquor distribution model.
The next step could be registered addict access to inexpensive, clinically pure and measured doses of heroin along with sterile needles and syringes. This step would immediately produce a substantial reduction in existing levels of crime typically associated with heroin junkies (burglary, shoplifting, auto theft, street level prostitution, etc). Make treatment and gradual withdrawal programs available to addicts who are interested.
Beyond that I won't speculate on further steps where other, more dangerous and destructive, drugs are concerned. But having managed to break away from the wholly counterproductive brute force approach to dealing with marijuana and heroin use the acquired experience might suggest a potentially useful approach to such really hard drugs as freebase cocaine and amphetamines.
One thing I will suggest is the same approach which has been eminently successful in dealing with cigarette smoking, which is realistic and motivated public education. That method is what encouraged me to quit smoking cigarettes after my 35 year addiction to them and there is no question that cigarette smoking has substantially decreased.
As for those who simply cannot, or will not, break away from compulsive use or the really hard drugs, your suggestion of voluntary isolation with unlimited access to one's choice of poison is the best idea I can think of. Because I strongly believe degenerate hard core drug use is slow-motion suicide.
I don't think a particular political ideology or philosophical approach can deal with all drugs, because they all have their unique properties and ways of affecting society.
Starting off with legal drugs, I've had the opinion that cigarette smoking and tobacco use is so physically addicting that the best approach would be removing purchasing it from the general public. What gave me the concept was noticing how hard liquor was dealt with in Onslow County, North Carolina, when I was stationed at Camp Lejeune. We could buy beer and wine in a Mom and Pop store, but the beer was only 3.2% alcohol, which is good for that hot climate. To buy anything stronger than wine, you had to go to the ABC store, which stands for Alcohol Beverage Commission. These stores weren't allowed to have advertisement and were only allowed to have an ABC sign outside. I'm fairly sure there was also a law that they had to be a separated from other shopping areas, so what I remember was a plain brick building with only an ABC sign above the door. They didn't even have advertisement inside the store to suggest a product. You definitely had the feeling going there that you were a social outcast from the citizens of that county, tolerated, but not appreciated. I figured the best thing to do with cigarettes was to phase quickly out the machines and do a similar phase out for other places that sold cigarettes and tobacco products. I figured around a two year phase out period and placing future sales in tobacco or liquor stores where strict ID applied, meaning anyone even looking close to being underage is carded, with stiff penalties up to losing your license for serving a minor. I'm not saying the businesses have to be like those ABC stores, but concept is to remove advertising and restrict the product to special locations for sales, just like all alcohol is restricted to only liquor stores in my state. My hope was such a system would prevent a new generation of smokers or drastically cut their numbers down. Other common sense measures like warning of the dangers of smoking in schools a couple of times a year starting at a fairly young age was also part of my concept. I never considered taxing and raising the price of an addicting substance to be a just idea considering many started smoking before the harmful effects were known and it was encouraged.
I'd suggest a similar approach to marijuana, but I don't like these stores in cities taking advantage of the high cost of pot and governments gaming the system. Pot could be put in liquor and tobacco stores, just like cigarettes. Pot is so harmless, I say legalize it except for exports, which is a treaty violation. I'd like to see it kept so cheap that there is no black market interest in it, just like there wouldn't be black market interest in cigarettes without the taxes. My state doesn't have a sales tax, but the only tax on pot should be the normal sales tax in states that raise revenue that way. Most people would just grow and freeze their own supply of pot, so all that money saved would be able to be spent on more productive products in our society. Obviously, I firmly support progressive taxation to the point of removing all excise taxes, except on a short list of luxury goods. I don't even believe in highway tolls or other hidden taxes.
I have a similar approach to you about heroin and other truly harmful drugs. I don't want users thrown in jail, but I want mandatory involvement in a program to deal with their drug problems, whether Methadone or whatever is the answer. The solution is to allow them to quickly plead guilty and get involved in dealing with their drug problems. They should be treated like sick people, but placed on probation with lose of liberty, so they can be checked in their homes. They should be required to surrender firearms. Care should be taken in devising any type of counseling or treatment program, because patronage and graft are often the rule and not the exception. The politicians will hand programs over to a fat cat, who will jack up the costs for their own profit. The rule of thumb should be find the cheapest way to effectively accomplish it and use existing government facilities that are owned and not rented, whenever possible. It's important to keep the costs low, because the people possessing the drugs are going to pay for it, which is a great incentive to get other heroin users and addicts involved to help pay the costs. A drug user without income should be a sure sign of other criminal behavior and alert immediate concern. I would make reporting for treatment or counseling a daily or every other day requirement, even if it's only a brief visit and stress frequent random drug testing.
With heroin and other harmful drugs on the user and dealer level, I'd suggest rewards for turning in the dealer or other dealers would work. Care should be taken that the award isn't used up in drugs, even with the person in a program, so the reward can be mostly or totally kept on the books for their treatment. The first step in dealing with a dealer is to lock them up to determine if they are a dealer or a user dealer and their behavior will usually allow that to be known, even if they are quickly out on bail, instead of pleading guilty. The solution really becomes carrot and stick police work at that level, if the person will not cooperate and get treatment. User dealers should be allowed to enter treatment whether incarcerated or not, but that has to be done with care to make sure they aren't dealing heroin or any drug for a living. I think it would be smart for Judges to require personal background checks as a condition of bail for anyone found in possession of drugs. The system should be interested in how the person lives and makes their money at that point and not later. Since a citizen has the right to a speedy trial, I'd give people caught with drugs every benefit of that right, even if I had to hold night court. Think about it, you get caught with a small amount of drugs, arrested and given a chance to plead guilty, when bail is set at a magistrate arraignment level, which can send you to a program. If the person chooses to plead not guilty or is caught with larger quantities of drug, they are quickly arraigned at the next court level, even if it's night court. If they continue to plead not guilty and want a jury trial, they're going to quickly get that wish, even if it's night court. Along the way the person can be sent to the prosecutor's office to review a possible deal. I personally think dealing with these drug cases quickly will eventually save a lot of court time, but some initial overtime may be required. The same quick path to justice and dealing with authorities like the prosecutor cutting a deal for a guilty plea could reduce a backlog of other cases and allow more concentation on important cases. The cops could even start the process by showing the person arrested what lies ahead with more specific and realistic details prepared by the prosecution, after giving them their rights and questioning them on video.
I still think the best way to deal with /cocaine/crack/coca is to destroy the plantations growing it before the March harvest, every two years if need be. Opium poppies are a different matter. Let's face it we are in Afghanistan and nothing has been done, but to increase production. I would think meth labs would have a unique chemical signature that could be traced. Doctors should be required to report the prescription drugs they prescribe and the pharmacy should check to see if the prescription has been reported. The doctor's ID, prescription number, date and the amount and type of drug is all the information required to identify a pill mill and the data can be checked by simple computer programs to locate criminal activity.