I guess I'll throw my two cents in. Here's the problems I have with legalization:
1. Logistics. Not only are you going to have to go through the process and costs of getting the prostitutes licenced, you're also going to have to pay the ongoing costs of having people to administer the system to make sure that the rules (valid licenses, mandatory testing, etc.) are all being followed. And that won't come cheap.
2. There is really no good balance to how long they should go between tests. If they have to go too often, then it puts another big burden on our already fragile public health care system (unless, of course, you privatized this for them and made them pay for it, but that's a whole other discussion). If they go too long, then the more people could possibly become infected if the prostitute does indeed become infected with an STD. And how many of those johns are going to be exclusive to that prostitute? Maybe 1 or 2 at most, others would be using other prostitutes as well, exposing them to possible infection and also possibly having sex with those not in the field, which brings the public danger.
3. Career perception and sustainability. Removing the stigma from it does make it seem "not so bad" in some people's eyes, and in a sense almost makes it so at least a few would consider it a career option. Personally I think people should aspire to become doctors, teachers, business people, construction workers, tradespeople, or pretty much anything else instead of prostitutes.
Also, on the subject of sustainability, two things come into mind. The first is, what if a prostitute were to become infected with and STD and had their licence revoked...then what? And don't say to use safe sex practices, because while they are somewhat effective at prevention they are not 100% guaranteed to work. So, because they have little training in other fields, they basically go into the "underground" scene where all the dangers apply again. My second point would be this...I almost think one could compare it to a career as a pro athlete, it doesn't last very long. The big difference between the two is I can't imagine any prostitute pulling down multi-millions a year to be set for life like an athlete would. And at the risk of sounding like a jerk, think of the mind of any random guy who would go out looking for a prostitute. Now, being fickle, how many of them are going to choose the decent looking, new to the scene 20 year old over the aged and worn 35-40 year old? The vast majority, so these other prostitutes wouldn't be making the type of money you would consider to be an income that could sustain a decent quality of life.
4. Nobody has really said anything to what the psychological effects are of the trade amongst those who provide it. But without any numbers, I'd bet that if they did a study on prostitutes before they started, and a few years after they started, that the vast majority would show that their psychological welfare has decreased significantly since they started. Why? Because how many of these prostitutes, regardless of the legality, would have a great level of self-esteem/personal satisfaction with themselves, knowing that this is what they do for a living. My guess would be not a lot.
Just something to chew on.