I was talking to someone about this subject just a couple of days ago, and we came to the conclusion that it may be best to have a worldwide amnesty with just about every sport you can think of. Set a date whereby anyone who has being using performance enhancing drugs can come forward (privately) confess their sins, and not have to face any punishment whatsoever (including those who've had previous bans). Then from that date forward, anyone caught using them gets an instant lifetime ban. Any medals, trophy's, records, prizes (including money) have to be returned or seized. Basically scaring the crap outta them with the threat of losing just about everything they've gained from the sport should make people think twice.
The biggest problem i had with cycling over the last few years is how the authorities handled the situation. It just made the sport look a complete farce, as different federations each had their own way of dealing with the problem. If i remember correctly that Danish rider (name escapes me) had already tested positive and was already under investigation before the start of the Tour, so why the hell was he allowed to race ?
And that's part of the problem with trying to police these doping issues within sport. All these two-bit councils and organising bodies within each individual sport seem to have their own agenda, criteria and levels of punishment for wrongdoing. Some hand out 2yr bans, some 4yr bans, some give a slap on the wrist and say don't do it again and some give lifetime bans with no exceptions. And if the wrongdoer is a megastar of the sport then, well he/she can get carteblanche. Won't mention any names here, but quite a few of the top sporting names where known to be using drugs, but nothing was done. And as you say, how does this reflect on the grass roots levels of sport.
It's a sad thing to admit, but cheating seems to be very much a part of human nature. And i'm not sure anything can be done about that, short of a frontal-lobotomy.