I propose instead keeping it illegal and increasing the penalty for prostitution, pimping, and adultery to death by firing squad.
Also, porn should be outlawed. Being involved in the commercial scale production of pornography should also be punished with death. Smaller scale things, of course, would not be punished by death. For example, a man who makes a video with his wife and fails to properly keep it private should be fined heavily or jailed. Mere consumption of pornography would just be punished with fines. Government regulation of ISPs would be the main way to crack down on this scum.
I hate so much the claim in this thread that somehow legal prostitution would make us happier. We already live in a degenerate society, how happy are we? Pornography and prostitution are widely available now. Does that make us happy? If you think that sex with some disease ridden whore who has fucked 10000 other guys is going to fulfill you, what the fuck is wrong with you? You need help.