Their is also the argument that smokers and regular drinkers actually save money for the state by not living as long on average. Fatal diseases that kill the individual within a few years require less financial maintenance than those patients who are physically healthy but require long term support, especially for diseases such as Alzheimer's, and the state might actually save health care costs for the aging due to the high risk nature of smoking and drinking.
Of course, this doesn't factor in lost work hours but I'm willing to bet that it balances out and that the amount we're really paying as a society to those who choose to smoke and suffer the consequences is basically nil.
However, when you look at the absolute costs of say...taking someone with a job and a family, putting them through a publicly paid trail, locking them into a publicly paid prison for many years you have removed that individual from the work force, put a cost burden on the tax payers and, from the precedent set of our prison system actually creating criminals, pretty much assured further societal problems and costs by locking up non-violent drug offenders to lengthy prison sentences.
The comparison between that and the health costs of high risk activities, which do offset themselves, isn't even close in my opinion.
So I think the argument can honestly focus more back on the idea of proper regulation.