One needs to be careful when making judgements about what the causes were for this growth.
One need to keep in mind that Germany has several strong driving forces for change in our society and around us.
* economic collapse in former east europe
* change in political and economic systems
* open borders
* a lot of poor and desperate people in Germany and in neighbor countries.
* Many european countries further in the east are even worse in most ways: no jobs, no perspective, corruption, very little recovery, ...
* Germany had an economic recovery during the last decade and has been able to control the effects of the world-wide financial crisis on its economy.
* the Euro in Germany and west Europe remained stable. In those troubled country in the east, there is no Euro. Some smaller countries now joined the Eurozone.
We had the reunification of east and west germany. 20 million people had a drastic change in life, with their economy collapsing, authorities gone, the political system changed, jobs gone, ... Some recovery happened in the last decade, but that was very tough for many people and dampened by a lot of money from mostly western parts of Germany. All borders to neighbor countries are now wide open. All the east european countries went through even harder economic times. The financial crisis made it even worse. High unemployment in neighbor countries, especially for young people, while unemployment in Germany was going down. Many people moved to west europe for work. Legal or not. Eastern neighbors all joined the EU, which for example now means that people can move freely and work freely in other countries.
Thus it's not easy to compare it with other countries and it is not possible to think about prostitution independent from the other developments. The number of people in prostition is not just depending on the type of law. Germany has rich West Germany and an added East Germany. At its border it has countries with a lot of poor people, formely all communist. This difference in wealth, job opportunities, etc. creates enough opportunities which can be exploited. Thus we would have seen a lot increase in the sex business, whether we would have legalized it or not. Trying to control that with police and laws would have been very very difficult. There are open borders to all sides. Thinking that young women from eastern Europe would not been here, if laws were tougher is naive. We didn't open the borders to create new ones.
I think it was a smart move to prevent people from going underground. Still it makes sense to look if changes to the laws etc. are necessary after more than a decade.