I think it should be legalized. My main reason is that keeping it illegal breeds disrespect for the law. Our society is at a point where marijuana usage is fairly common and is socially acceptable. Obviously this varies from place to place, but the point is, people flout marijuana laws all the time and no one cares - people laugh at it. When the government makes laws that it can't or won't enforce and that a wide swath of society does not support, it makes the whole legal system look like a joke. At the very least the Feds ought to decriminalize it and let it be a state issue - they look both stupid and hypocritical with California "legalizing" it and potentially starting to make large amounts of money off it while people sit in prison for distributing and/or using it.
There are other reasons to legalize that I'm sure will be mentioned by other posters.