An interesting idea.
On the one hand it could be argued that such a system would only be a drain on the country's economy in an area which both avoids and hinders economic growth. Also given the drugs used would most likely be illegal for the time being, it could infer that the government is contributing to and encouraging drug abuse instead of actually tackling the problem.
The flipside to this however is if it can reduce incidence of STI's and other drug related conditions/illnesses, the budget devoted to the resulting treatments could be better allocated to other concerns (it would also be interesting to see if such a potential saving could exceed the costs of a service like this being introduced). Also encouraging abusers to actually return the needles is an interesting way of getting them out of the environment where they could cause even more harm; and if its free, abusers may see it as a cheaper and safer way of maintaining their addiction (although I wouldn't really want them to see it like that, but it could be a way of getting them into an environment where they can actually receive advice and information, and be encouraged to actually get off the drugs).
It could also be argued that providing such a service would encourage abusers to come forward, and remove the barrier of criminality which may hold some abusers in the dark, refusing assistance for what they may fear could happen to them in the criminal justice system. And who knows, it could encourage the drug culture to shift, and instead on hindering the "war of drugs", abusers could assist in the political and legal effort to cease it. However at the same time, it may be an incentive for abusers not to come forward as their details could be recorded in order to receive the needles, which could potentially be used against them in future.
I could waffle on further, but I think trialling it as a potential initiative is what I would probably go for, as although it seems to have some merit according the link provided in the initial post, the uncertainties could suggest it be quite damning if it fails. But anything which could be used as a tool for reducing such a problem in our society, without instantly turning to a criminal perspective, should be at least considered critically.















