Rolling Stone online has a very interesting article on the history of the drug war. They address a lot of the futility of the fight. But I don't think they make the ultimate leap to complete legalization. Their reasoning seems to drive them toward that conclusion but they just can't seem to come out and say "We should legalize cocaine."
Here's how I see it. We should legalize it all. Major drug companies can produce pure drugs, safely cut the product, sell it in varying strengths. This will do one major thing for this country. It will destroy gangs. The major stream of financing for 99% of all gangs is drugs. If we legalize it the price will drop, gangs won't be able to compete in a black-market vs free-market fight, and with the money gone the gangs will either turn to other means of raising capital (unlikely to create the same returns as high profit drugs), or begin to evaporate.
If we legalize drugs people are not going to rush to the local pharmacist to get some...
Indeed, Steven D Levitt did quite a bit of research into gangs and found that things like armed robbery just aren't economical ways of making a living and certainly not contrusive to funding or forming large gangs as seen in many of America's cities. Illegal crack cocaine, however, is the opposite.