I'd be concerned about that falling extra-heavily on homeless people in some way. If someone were already stuck sleeping on a park bench, it'd be kind of unfair to ding them again for not being tipsy or high "back in their own home."
In practice, cops could just arrest for the sort of public drug use that causes problems
The idea stills holds merit in my mind. Yes, it condones drug use and illegal activities, but it also cleans up the surrounding areas. I think it would also serve as a deterrent for the casual trying of a substance that could result in lifelong addiction. Who in their right mind would want to go to such a disgusting place to try something new?
It turns a problem that is currently diffuse to a problem that is concentrated. Like the difference between coal power plants spewing CO2 into the air versus nuclear power plants that leave radioactive waste that can be contained in barrels. Not the greatest analogy, but the point stands.