[T]here are probably so many guilty suspects (...) that the legal system does strictly worse than (...) just assuming that everyone is guilty.

Careful, there: the economic damage of not locking up a thief is much lower than the economic damage of incorrectly locking up a non-thief. "It's better that X guilty people go free than that one innocent person goes to prison" is a good principle.

(Note that X is likely to have different values for weed users, thieves and serial killers.)