I bet if you were around during Prohibition you'd say, "Legalize alcohol and the gangs will be gone and we'll finally have peace in the neighborhoods".
BWAHAHAHAHA!
It certainly didn't turn out that way. Once booze was legalized, the gangs turned to drugs, in addition to the ever-popular hookers, gambling, loan-sharking, and other rackets.
Legalizing drugs would simply close down one "silo" in a gang's business plan.