Why do you assume people would still be incarcerated at the same rates if drugs were legal? The "prison industrial complex" depends on the consent of the voters.
Just getting 3 Strikes laws undone would be practically impossible. Any politician proposing it would immediately come under attack by an opponent who would gladly pick up that rock. Political courage is uncommon enough to be an oxymoron.
But there are a whole lot of people in the pen for selling relatively small amounts of drugs. I don't see the government passing new laws to replace them if drug laws were repealed.