First of all, the Robert Peterson book around which you build your argument is a sketchy source at best.  Published by the far-right Hoover Institution, and I went and read the "chapter" you quoted and there are scant few objective source citations in it.  Most of the "data" presented comes from other anti-legalization sources or from the DEA.  At one point, the author even uses his own newsletter as a source.  So the claims he makes are questionable at best. And the fact that the chapter concludes with an "if they say, then you say" guide for arguing against legalization shows that it is hardly a scholarly undertaking of the question.

Even so, the arguments are still flawed even if we assume they are true.  So what, the Netherlands has the highest crime rate IN EUROPE? The Netherlands may be the most liberal, but no country in Europe has the U.S.'s insane drug policy, so you're comparing apples to oranges.  To conclude that drugs are the reason for that the Netherlands has a higher crime rate than other European countries (if that is even accurate) is fallacious.

Similarly, the size of a city's police force isn't really relevant here.  Amsterdam may have a larger police force, but has a much lower crime rate , and much less drug related crime, than major American cities.  They can probably AFFORD to have a larger police force because they AREN'T wasting billions on a DEA or wasting billions incarcerating people who committed no crime other than drug use.  We don't need to make tax revenue to make legalization fiscally attractive.  Just the things we can STOP doing will save us countless billions.

Finally, the idea that people are saying that legalizing will solve "EVERY drug problem" is a straw man.  No one is arguing that.  We all know drug problems will be around no matter what.  But considering that it costs about $0.15 to produce a kilo of marijuana, and about $2 to produce a kilo of cocaine or heroin, there is no doubt that legalization would substantially put the drug cartels out of business and substantially curb the violence but cutting off their ability to make billions selling something that is very cheap to make, but is only expensive because it is illicit.

Problems with users will still exist, but we need separate, effective programs to deal with those problems.  Not prohibition, which is a strategy that has been a demonstrable failure for centuries.  No one is arguing that EVERYONE should use drugs and that we should stop trying to address the problem of addiction and lower drug use.  Most everyone agrees we should do those things.  It's a straw man argument that those who are for legalization are for ignoring the problems that drug addiction can create.  But the intelligent among us recognize, prohibition is a 100% failed strategy for preventing drug use or dealing with the problems that arise from addiction.