As for the non-drug side, well, let me say this. I went to college with a number of people from the DC political circuit, and they would get together each week to watch The Wire and drink and laugh. The reason for their laughter? They personally knew the people in the show that the characters were quietly depicting, and would find their portrayals accurate or hilarious. There were more than a few articles that came out when the series first aired of local noteworthies accusing The Wire of slander, to which The Wire's writing team would respond: "What made you think you were this character?"
But yes, ultimately I agree with you. The Wire is a fiction intended to be very close to reality, to make a point about the state of that reality. I think one of the major points, is the one I wrote above.
But the show was definitely not in any way about the reality of the drug trade because it didn't depict the reality of the drug trade, especially the drug trade in Baltimore (if anything, it has vague similarities to the 80s-early 90s drug trade in Chicago.) Yes, I know he worked at the Baltimore Sun. The Corner was exactly authentic Baltimore. Even Simon would tell you that The Wire isn't.
The drug trade was a setting for making statements and playing out thought experiments about morality, power, and institutions (which you've pointed out from your perspective.) But if you see it as an accurate reflection of the drug trade anywhere, you're being deceived by fantasy fiction.