The only point I would argue against is the message legalization sends to the kids. You are right that the illegality appeals to the rebellous kids, but legalization would make it no worse than drinking. Teen use would go up.

I heard a lawyer friend explain to me once that kids do not have the right to privacy. They could be tested, though after the Supreme Court decision on searches I'm not sure that still applies.

If we could find a way to keep it away from the kids and make the penalties for public intoxication so high as to serve as a real deterrent, I'm all in favor of legalization.