The error in your reasoning is that all these things do have external effects, but the connection between an external effect and the source is not always apparent. To specifically use the example of fraud, a great number of business operations are under forced reporting requirements for specifically this reason. Your answer to this point is flatly incorrect, as fraud cannot and is not effectively detected in this manner today.
Regarding murder, you suggest "if someone is missing, start an investigation." Of course, the error in your logic is that we do have evidence of drug crime -- and plenty of it. There is no question that Alameda county is full of grow-ops, which produce drugs for the surrounding region. I know, because I live here. There are many, many busts every year. Mountains of evidence.
The reason to limit this sort of investigation is found in the 4th amendment, and it is more than adequate when applied here. Kyllo v. United States is very clear on this point.