I agree with your premise, but this statement is incorrect. Civil forfeiture originated from the British Navigation Acts of the mid 1600s. It continued to be accepted practice in the US after the revolution, and was relied on during Prohibition as a tool against bootleggers much as it's used against drug dealers now. Usage has certainly escalated due to the war on drugs, but it's not where it originated from.
I am not sure how addicts were treated by law enforcement historically but would be curious to hear about that. Just my own intuition says they probably were treated under existing vagrancy laws "Vagrancy laws took myriad forms, generally making it a crime to be poor, idle, dissolute, immoral, drunk, lewd, or suspicious."
The prison guard union is one of the most powerful lobbyist groups in California (and significant in the US as a whole) and has all the same perverse incentives as private prisons.
If you want to really address the problems, the prison guard union and police unions are literally 100x more powerful and impactful to laws and policies, and their PR teams love it that the internet stays distracted by the 8.2% of prisoners who are housed in privately-run prisons.