I love the idea of making the victim whole to find justice, that is all that really matters. I also like that you are offering specifics for alternative solutions to the problems currently in our justice system, instead of just pointing out that the way its being done is wrong.
Who decides when and how a person should be made whole again is a tricky question to answer indeed, but the resolution organizations handling that is not a bad idea either. You have my support on this, f**k the drug war!
I invite you to also check out Unitive Justice. This can serve to not only help restore wholeness to the victim, but also the perpetrator and all those affected by the conflict by implementing reflective listening to discover the underlying brokeness and find mutually beneficial actions.