Sure, I took Econ 101 too. But the problem is that that's 101. Once you get to a more advanced level you find more complexity. It is completely possible to generate demand. In some sense this should be obvious as there was no demand for smartphones 50 years ago. You might say some of the ideas were there and thus that's demand, so that could be fair. But certainly not if we go back 500 where even many of these concepts did not exist and the demand would be for easier communication, a much more abstract idea. I mean in Econ 101 you learn about the Efficient Market Hypothesis too, but no economist actually believes it to be true.
With drugs I think this is a bit more apparent because there is addiction. It is well known that a common strategy is getting users hooked. Either by offering some initially for free or at a reduced price, or by increasing the addictive qualities of the product. In fact, we even see similar phenomena in the white market. Starbucks coffee has about twice as much caffeine as a standard cup[0] and this certainly creates a higher demand for their coffee. But I don't think many are aware of this.
Also consider there are different ways of "legal." Some places have "decriminalized" drugs, which would be in line with this idea. For example, the state of Oregon in the US did this. Many people portray this as legality, but it isn't. If you are found with drugs there they will still be confiscated AND you pay a $100 fine and the court will give you information about addiction treatment centers. So not really legal, but not a major criminal offense. That seems like a fair way to put pressure towards manufacturing and distribution if you don't want to just legalize possession (which would always be limited in quantities).
I also just don't buy your analogy in any way. We reduce things that have demand all the time through market regulations. Anything that is illegal to sell or produce is something that there is demand for somewhere. There's a HUGE demand for slave labor, but we've regulated that away (demand is for cheap labor, and slave labor is towards the cheapest one can get if not THE cheapest). The reason to go after manufacturers and distributors is because network effects. When you cut off a dealer you cut off all the people who got their drugs through them. Of course another dealer can take their place, but the effect is still real and far more disruptive than going after tree nodes. You are cutting off branches and the new dealer is like trying to reorganize those orphaned nodes. It's harder. The manufacturers are nodes much closer to the root and so have much greater disruption downstream. You're right that there are orphaned nodes, but it isn't uncommon for people to get off drugs after their supply runs dry. You've essentially forced them.
With drugs I think this is a bit more apparent because there is addiction. It is well known that a common strategy is getting users hooked. Either by offering some initially for free or at a reduced price, or by increasing the addictive qualities of the product. In fact, we even see similar phenomena in the white market. Starbucks coffee has about twice as much caffeine as a standard cup[0] and this certainly creates a higher demand for their coffee. But I don't think many are aware of this.
Also consider there are different ways of "legal." Some places have "decriminalized" drugs, which would be in line with this idea. For example, the state of Oregon in the US did this. Many people portray this as legality, but it isn't. If you are found with drugs there they will still be confiscated AND you pay a $100 fine and the court will give you information about addiction treatment centers. So not really legal, but not a major criminal offense. That seems like a fair way to put pressure towards manufacturing and distribution if you don't want to just legalize possession (which would always be limited in quantities).
I also just don't buy your analogy in any way. We reduce things that have demand all the time through market regulations. Anything that is illegal to sell or produce is something that there is demand for somewhere. There's a HUGE demand for slave labor, but we've regulated that away (demand is for cheap labor, and slave labor is towards the cheapest one can get if not THE cheapest). The reason to go after manufacturers and distributors is because network effects. When you cut off a dealer you cut off all the people who got their drugs through them. Of course another dealer can take their place, but the effect is still real and far more disruptive than going after tree nodes. You are cutting off branches and the new dealer is like trying to reorganize those orphaned nodes. It's harder. The manufacturers are nodes much closer to the root and so have much greater disruption downstream. You're right that there are orphaned nodes, but it isn't uncommon for people to get off drugs after their supply runs dry. You've essentially forced them.
TLDR: focus on the choke points in a network.
[0] https://www.washingtonpost.com/opinions/five-myths-about-caf...