Prohibiting voluntary victimless activities of the physical kind didn't even work very well in the 20th century. The technological kind in the 21st century? Downright impossible. It just moves outside your borders - and outside your ability to tax. Unless I'm ignorant of some industry-specific facts I think this would be a win-win for everybody (except, as always, the poor souls that willingly throw their money away...)

Edit: Good point by cellis below. Still, I think legalizing activities via connected interests is progress compared to fake illegalizing that exists currently.