The key point here is that the lifestyle being subsidized, as awful as it may be, is still less awful than what anyone attracted to it would be doing otherwise.
Really? You don't think anyone would decide to go through the agony of detoxification and recovery because they have to endure more of the negative effects of their addiction? No one is at that marginal point of overcoming their addiction?
It seems from the article that for the people in the wet house in question there is no marginal point of overcoming their addiction. They've decided that given a choice between continued sufferring on the street and an early death, or getting clean in a treatment program, they prefer continued alcoholism and death.
Take a look at this 5-minute clip of supper time at a wet house. They're not getting clean, regardless of whether they're in a wet house or not. They've chosen to die slowly, and they'll do that whether they're homeless or not.
"Wet houses"-- subsidized housing for alcoholics (they need to get most of their own money for alcohol, but their other expenses are covered) might actually be a good idea. It's cheaper than trying to get them to stop drinking, arguably kinder than trying to get people to take on a very hard task that they aren't interested in, and leads to less collateral damage than having alcoholics couch-surfing or living on the street.
Utilitarians, what do you think?