Why doesn't a war on drugs work?

From Wikipedia: The War on Drugs is a prohibition campaign undertaken by the United States government with the assistance of participating countries, intended to reduce the illegal drug trade—to curb supply and diminish demand for specific psychoactive substances deemed immoral, harmful, dangerous, or undesirable. This initiative includes a set of laws and policies that are intended to discourage the production, distribution, and consumption of targeted substances.

http://en.wikipedia.org/wiki/War_on_Drugs

In my opinion too much money is wasted on building additional prisons or attacking peasants in third-world countries. Instead countries should rather invest in education, prevention and rehabilitation. Fair trade models could offer peasants alternatives to growing coca and poppies.

What are your thoughts about the co-called war on drugs? What alternative strategies and best practices are there to reduce substance abuse.