The problem I have with this logic, is that I suspect with legalization/regulation, supply increases to meet or exceed demand, and drives prices down. This isn't a tremendous economic problem with drugs, because it should be relatively straightforward to ramp up production (and employment and tax revenue increases with it). With prostitution however, trying to increase the supply and driving down costs creates problems. Willing prostitues no longer earn as much, making the job much less appealing, and trafficing potentially increases in order to meet new demand or a decreasing supply of willing prostitutes.