An interesting piece in Wired advocates steroids be permitted in sports but that they be regulated:

Imagine a world where performance enhancement was open and regulated. Instead of forcing athletes to sneak through back alleys to stay competitive, sports authorities should admit that drugs are essential - then help athletes cope with the side effects. Once legalized, drug use would still have limits, but they would be established by physicians and athletes - based on their ability to handle performance enhancers. Bad outcomes would be far less frequent if players were not forced to rely on quacks (such as the former Tower of Power bassist at the center of the baseball designer steroid scandal). Innovation in performance enhancers would accelerate in the light of day. There might even be spinoff applications that would benefit you and me.

To be sure, monitoring all this would be tricky. Balancing benefits and costs is hard. So for pharmco Luddites who want a simpler world, where performance enhancers don't transform competitions and the cult of the natural still thrives, I have an answer: Create one league for the genetically engineered home-run hitter and another for the human-scale slugger. One event for the sprinter pumped up on growth hormones and another for the free-range slowpoke. One tour for the supercharged cyclist and another for the antidoping racer.

I made this same suggestion a while back.

While I see some merit to moving over time to a two league universe, let's not kid ourselves. There's no guarantee that legalize-but-regulate means that athletes won't push the envelope or do back-alley doping to gain an edge. You can leglize-but-regulate to your heart's content and you won't get rid of the competitive desire to best the competition. The implications of that are obvious.