Just like alcohol, the government has no business manufacturing and selling it. However, they could regulate and tax production and wholesale distribution. As it is, controlling the entire value chain is a big issue. Even in the Netherlands, production and wholesale distribution is in the shades of the legal system, while retail distribution is legalized and subject to taxation.
I agree and CO and WA are very possibly baby steps toward it being a nationally taxed thing. Hard not to think more states (blue more likely than red) will go this direction. NYC is edging in this direction. Issues like this, and say, certain gun laws create interesting coalitions, i.e. cops on the 'liberal' side -- for legalization/banning assault weapons. The opening of 'Layer Cake', the movie that got Daniel Craig the Bond role, does a great job of summing up this (and many) aspect of the drug issue. He's a dealer, and his VO ends with '..one day this will all be legal..' and he'll be out of business.
OT: Layer Cake had the best opening 10 min of any movie of '05, and the rest is excellent.