Let's take these in order.
Reduce crime in the US
If all drugs were legalized, it would not be illegal to buy and use them. We could create a series of distribution centers in every city, funded both by a new sin tax on drugs and diverting law enforcement funds to support the new centers. The centers would be privately run but licensed through each state. Revenues would be shared between the states and the federal government based on actual monies collected. Law enforcement would not need as much funding because drug-related crime would be reduced. Prison populations would decline and prison overcrowding would be reduced. Next door to each distribution center could be a privately operated clinic to help users kick the habit.
Reduce crime across the border in Mexico
If Americans were no longer buying illegal drugs, Mexican drug cartels would have to find other avenues through which to sell its products. Crime might be diverted to other areas in Mexico. The Mexican authorities might even be able to gain more control of their failed state. Border cities could become safer on both sides of the border. And Eric Holder might have less interest in supporting failed policies of sending guns to Mexico to trace where they end up. They end up in the hands of criminals. Idiot.
Provide a strong new taxable revenue source to the US
Can you spell sin tax? Prohibition didn't work, but taxing a legally available product did. Anti-smoking campaigns didn't work, but taxes on cigarettes and cigars added to state coffers. The same could happen with a sin tax on legal drugs.
I realize this is a radical, liberal suggestion. If we start with legalizing marijuana in all states, the FBI wouldn't be put in the awkward position of busting legal medical marijuana shops in California.
Yes, this could work. It's too logical not to work. Therefore, no one will put this idea forward. Wonder what the "super committee" would think about it.