As someone who currently lives in Vancouver, this is such an inaccurate, disgustingly unsympathetic stereotype of the people of the DTES. There's so many people in that area that ended up there for a plethora of reasons. Some people chose the lifestyle yes, but far from most of them. Some grew up in poverty and had nowhere to go, Some lost their jobs and ended up on the streets, some have jobs and literally can't afford a place to live in Vancouver. Not all of them are on drugs. Many of those who are on drugs fell into it due to their situation, as they get into it as a way to make it through the day.
To paint everyone all with the same brush simplifies the complex situation of how and why people end up there. To essentially advocate for people to be jailed for where they ended up in life, instead of looking at why they're in that situation in the first place, is pretty messed up.
When it comes to "free money for their habits" the point is not to encourage use, but to make sure they don't die or get sick, and give them an opportunity to help them get clean. If you want to take the pragmatic view, it's actually cheaper to provide them safe needles/drugs than it is to deal with the healthcare and emergency services required when they take laced drugs or overdose. It's also much cheaper to help people than stick them in jail. Jailing someone costs like 100k a year. We can do so much more for so many people with that money instead of resigning them to a life of being in and out a jail. Once you get into the jail system it becomes incredibly hard to get out of that system.
Not everyone wants to get out of the homeless situation, or will, but it's our responsibility to help those most in need in society and give them an opportunity to get back on their feet, especially when it's our economic system that failed many of them and resulted in them being on the street in the first place.