How do you suppose that happened? Do you think there was a severely addicted population that could not get their fix due to concerns of transmittable diseases? So were forced to quit cold turkey, at the height of their despair, for lack of sanitary injection paraphernalia? You surely realize how absurd that sounds, right?
Since you seem to be a well reasoned and articulate person, I'm genuinely curious how could a needle exchange program cause neighborhoods to turn into "drug slums"? Perhaps you are seeing a correlation with drug use that does not reveal any causality? Perhaps needle exchange programs induce normalization of drug use in a certain area, making addicts fell less rejected and thus attracting them there? But surely such a visible concentration of addicts in a certain area is just a symptom a much larger invisible problem and condemning those those affected to AIDS or Hep-C does nothing to solve the root cause?