There's a lot here that needs to be picked apart. Here are the major things you're missing:
1. Marijuana has been researched extensively and its health effects are at worst similar to alcohol, at best significantly less bad for you. In that context it makes sense to think of marijuana as a consumer product, and it makes sense that requiring a consumer product be sold in a dangerous and unregulated way would reduce demand for that product. Under these conditions we can expect legalization to increase demand, and it has.
2. Portugal's policy is decriminalization not legalization, and its success has not really been about soft drugs, it's been about hard drugs. People who do not have some kind of mental illness do not use hard drugs frequently for the same reason people without mental illness do not drink bleach: it's bad for you and if you care about yourself self-preservation is important. Portugal's solution is about the people who don't or are unable to care for themselves, and recognizing that the drug use is a symptom of that, and that you cannot fix the underlying mental issue by putting people in cages. Their solution is not "stop doing anything and fully legalize," it's "require people to be treated" instead of "require people to sit in a cage." Under these conditions we can expect decriminalization to decrease demand, and it has.
Edit: Also, I do very much agree with your larger point re: overconsumption, and I'm not saying we should ignore that problem either. Mental health in this country is a disaster, I just don't think putting people in cages is the solution.