and without some form of more serious government intervention, the employees and consumers will cause NEW enterprises to replace them.

Perhaps you should read the link. The argument is that the existing industry can be bought out and replaced by a nationalized agency that, because of reconciled incentives (the same government which is earning the income must also pay most of the healthcare costs, which vastly exceed the profits) can engage in strategies to manage the demand consistently downward with a variety of strategies such as reduced advertising, reduced nicotine content, or higher prices, which reduce the number of people who want tobacco products. If there is no demand because people have not gotten addicted and there are other substitutes for it*, then there is no reason to expect a black-market of large enough scale to make a meaningful difference to public health; if at the end of the managing down of the current 3m smokers, there's a small black-market of 10,000 people supported by cheaper stronger foreign cigarettes smuggled in through airports - then public health Mission Accomplished.

It's true that for many popular drugs, regulations or banning can have backlashes, but it's also possible for some drugs to just fade away or people rationally substitute similar but better drugs; the research chemical scene churns out hundreds or thousands of new drugs, many of which enjoy a brief burst of popularity until they get banned or people move on to the next new thing. The author gives some relevant examples from public health:

It is possible to combine restrictions on additives and nicotine delivery. The effect would be to reverse the development process of the modern cigarette, which could be effective. Removing the addictive elements of a harmful product is neither novel nor revolutionary. Compulsory reformulation of compound analgesics and the eventual ban on over-the-counter sales in the late 1970s effectively reduced consumption and were followed by dramatic reductions in analgesic nephropathy and other harms of compound analgesic abuse.25 It stands as one of the great achievements of public health by regulation. Importantly, the products were never banned outright but use just faded away. Control of petrol sniffing and other volatile substance use in Australian Indigenous communities is another example. Although a number of interventions and educational actions had been undertaken, it was fuel substitution finally culminating in the implementation of OPAL fuel that saw reductions in sniffing of the magnitude of smoking reductions that are required to reverse health harms.26 Although other actions will be required, only the elimination of a tolerable, addictive cigarette will truly address the harms of smoking in the most vulnerable groups and is the cheapest, effective action as the full costs are transferred to the tobacco manufacturer.

It's remarkable to see you attack it as a proposal for a full illegalization when in the first first section of the preface, the author denies that as a suggestion and warns that pro-tobacco people will try to strawman proposals into prohibition:

That said, an outright ban is a very easy target for the arguments of the opponents of tobacco control. In general, prohibition has not been an effective strategy to eliminate use of other substances. It can easily be crafted by the tobacco industry as an affront to liberty or as counter to the autonomy of individuals. On those grounds, it will probably not be the answer. A separate consideration is whether some tobacco products presently available should be restricted or banned. Oral or chewing tobacco is banned in Australia but used widely in some other countries. There is thus a precedent.

* funnily enough, I think 'substitutes' here is as broad as smartphones. One of the major uses of tobacco products has always seemed to be as something to do with your hands, kill time, and idly socialize with others (as suggested by smoking studies where nicotine-free cigarettes offer relief, indicating that tobacco addiction is as much about the habit and activity as the actual chemical contents), and smartphones can do all 3 at once.