Coca leaf tea is one thing. What about crack? Don't say it would never have been invented without criminalization; everything is invented eventually.
What about it? Serious drug addiction is a mental health problem. We'll never solve this problem without focusing on it directly. Trying to "get drugs off the streets" is focusing on the symptom, not the cause.
When alcohol was legal SOME people went for the harder stuff but beer was a lot cheaper and more common; under prohibition, whiskey was cheaper than beer. If you are selling an illegal product, your legal risk is generally proportional to the volume of product being smuggled or kept so you want to maximize the number of effective doses per unit volume. The economics thus favors high-concentration forms of whatever drug. It also favors faster, more intense highs, in that if people are going to all that risk to get something they want to be sure the payoff is proportional and can't afford to wait around for the effect. So cocaine becomes more available relative to pot, and becomes available in more concentrated and more convenient forms as technology permits (versus the old way of making tea from cocoa leaves and using it as a pick-me-up beverage)
So yes, "crack cocaine" was the result of prohibition. Yet even crack could be used responsibly - it's exactly like regular powder cocaine or caffeine in that regard. But responsible use is more likely if it's legal.
To be honest, whiskey is expensive only because it is a branding and social experiment that was successful, not because of the cost of manufacturing it.
I haven't yet gone through the book you linked, but it appears from a quick glance at wikipedia that chronic cocaine usage does bring with it some fairly bad physical side-effects. Are you saying that chronic usage will be rare if cocaine were legal?
You seem right however about heroin: "Like most opioids, unadulterated heroin does not cause many long-term complications other than dependence and constipation." I had no idea!
With heroin, the physical harm is almost ENTIRELY due to illegality - when a heroin addict can get the drug cheaply and in a known dosage and use it safely, they don't really have a problem. Our moral puritanism says being addicted is JUST BAD so we pass laws that CAUSE most of the harm we attribute to the drug.
Cocaine isn't quite like that. If you take a lot of cocaine it can cause nasty psychological symptoms - paranoia during use, depression between uses. On the other hand, cocaine is quite a lot like caffeine (and other stimulants) in this regard. Too much of any psychoactive drug is bad, but in moderation it's safe enough and has often been used by truck drivers who need to stay awake. Or people who need to be extra creative (eg: Robin Williams)
Even for this drug, the net harm of illegality almost certainly exceeds the net benefit. One could imagine a world in which making cocaine illegal stopped anyone from doing cocaine, but that's not the world we actually live in. The world we actually live in, it's generally accepted that our last two presidents used cocaine in school - it's not really fair to throw people in jail and take away their kids and their stuff because they were poor and used cocaine while people who are rich and use cocaine just get away with it. Which is what the current regime seems to amount to.
It's really hard to quantify what effect has been of this. Bolivia by all metrics is an underdeveloped country. Has this contributed to it or not? No way to really know..
Also I'm not convinced about the social effects of heroin. I think it DID have effects on society and that's why it was eventually outlawed.
The vast majority of the harm illegal drugs do to people is due to the drugs being illegal; it has nothing to do with characteristics inherent to the chemistry of the drugs.
(I recommend the book Licit and Illicit Drugs. You can read it here online: http://www.druglibrary.org/schaffer/Library/studies/cu/cumen... )