Exactly. There will always be people doing drugs and paying for sex. I think Amsterdam is in a unique position to try and come up with ways to make this all work. It's definitely new ground, and won't be an easy task to say the least!
Most major cities in Holland have a red light district. The Hague has two, Rotterdam one.
Most major cities have one. The only difference tends to be how obvious it is to visitors. E.g. walk around Soho in London and pay attention, and you see hints of it all over the place; they're just not sitting in the windows.