No, it should remain illegal, but society should continue to turn a blind eye towards it...it provides convenient grounds to bust people that, for whatever reason, you can't pin bigger charges on, so keeping it illegal gives law enforcement one more charge to bring down on those people's heads. Same way I feel about booze...if there's someone under twenty-one that really needs to be arrested, alcohol charges are a convenient way of doing it.
MIP (of alcohol) is an bustable offense. Like Tweed says, minors possessing tobacco is not even a "citable" offense in most places, as far as I know. Definitely not arrestable.