Drugs are a major problem in Central America, but they are worsened by a much bigger problem, one that can't be solved by legalizing marijuana, cocaine, or opium: the lack of public security. From the out-gunned police on the streets to the weak judges in the courts to the corrupt politicians, communities and countries struggle to maintain basic control over their own security. Ultimately, drug legalization -- like the drug war it's meant to solve -- would succeed only if public security is fixed and would fail if it isn't. That means better-trained and -equipped police, new campaign finance rules, faster and more independent courts, and even improved prisons. It means addressing not just the problems in the police and courts but the widespread poverty, malnourished children, and poor education systems. It means creating transparency in the public sector, curbing corruption, and breaking the long-standing links between organized crime and politics. Without these enormously difficult steps, neither drug legalization nor any drug war are likely to solve Central America's problems.
I agree that drug legalization will not "solve Central America's" problems, but I've never actually heard anyone argue that it would.
Instead, I see the current discussion in Latin America as a "critical juncture." This refers to a moment when the trajectory of something can be changed. As Collier and Collier put it in Shaping the Political Arena, they may involve a "relatively brief period in which one direction or another is taken or an extended period of reorientation" (p. 27). In the context of the "drug war," it means the opportunity for a regional rethinking of policy. This doesn't necessarily mean legalization--which should not be viewed as a monolithic policy in any case--but rather willingness to look at all options based on what has succeeded and failed up to this point.
A very good idea would be for the Obama administration to get out in front of this, and convene a forum/meeting with representatives from every country. It wouldn't have to result in anything binding but rather would be an opportunity for each country to air its views. We need an opportunity to take stock and see what kind of consensus exists, and what divisions remain. Hopefully this would lead to some sort of policy reorientation that would be broadly acceptable, or at the very least would take the Latin American side more into consideration.
Of course, it won't happen, especially not in an election year. But the U.S. can keep ignoring Latin American views at its own peril.