To say it with one word: Drugs are bad because they are often fought against with the wrong and harmful policies i.e. war on drugs.

As Jaez wrote emself there are grossly taken two ways to take drugs: use and abuse. When the state prohibits drugs it prohibits some people to enjoy themselves. Of course it can be argued that problems caused by abusers are greater than the loss of happiness among the recreational users but imho, it's quite unlikely to be the situation because the abusers want drugs anyway. And they will get 'em.
That's why, in order to get rid of drugs you have to get rid of the demand. There are experimental examples that even capital punishment is not enough to put down the supply.

The vicious circle of "tough" drug policy:
Punishments get harder
-> the risk of selling drugs increases
-> increase in risk decreases the supply
-> However, There's a bigger gap between the demand and the supply
-> prices of drugs increase (just basic functioning of markets)
-> Increased price attracts more sellers but they're more prepared against police and ready to use any means necessary to avoid punishments. For example, if you'll be executed due to the crime you committed, it makes a lot of sense to kill all the police officers who are after you.

Summa summarum: The situation is much worse after war on drugs. The users themselves as well as the society are paying the price of wrong policy.

Finally, as Pentti Lajunen put it: "All the problems would be solved if only security cameras were installed in every citizen's arsehole."
Note that they can't even get drugs out of prisons.

The only way forward is the policy of harm reduction. When you don't know how to get rid of it, you have to know how to deal with it.

Finally, couple of words about these two concepts:

Distortion of mental functions:

With this morally charged verb (distort) Jaez claims that certain state of mind is somehow better than others and the only good one. It can be suggested that Jaez means the state of mind unaffected by any substance. It's hard to see why so. People think differently and indeed, they have different states of mind. Which one of these is The Correct one? Furthermore, as well as saying that drugs distort your mental processes it could be claimed that they, vice versa, clarify your mind. Many people have had religious experiences or they have found something essential from themselves while being high.
And is chocolate a drug? Caffeine? Etc.?

However, the rumour that Windows were found due to LSD-trip reverts all positive consequences of drugs...

Dissipation of will:

Clearly, this is not always true. For example, I know people who take amphetamine when they have to clean their room -- clearly the drug use for them is not a problem at all. Experienced by many close friends, the will is not dissipated by every drug. These kind of arguments should be used against certain type of drugs, not drugs as a one entity. Illegal generalization, ah says.

Well, well.. Just to clarify few points..

First of all, I'm not supposing anything at all about drugs in the case of the vicious circle. You may replace "drugs" with any product of your wish and the outcome will be the very same.

Secondly, I doubt there's such a thing as a "limited cadre of professional criminals". The opportunity makes the thief, and more people will be attracted by the massive profits of drug trade. Well, the number of human population is a finite number but..

As an experimental proof, I would like to point out two countries of different policy:
Netherlands (harm-reduction) and USA (zero-tolerance).

Now, The Netherlands are not a paradise but they have really achieved some of their goals where as The United States has imprisoned a great percentage of citizens (the worst rate in the world..) due to drug offences but there has been no or just little improvement.