I'm not arguing for a lawless society, but as close to it as possible. Laws are the enemy of freedom, and a healthy society can't develop properly when there are too many. Punishment for crimes against people and property are a part of a healthy society, but punishment for being gay or high or mean is wrong.
It's not ever the government's job to legislate moral behaviour or to prevent someone's feelings getting hurt. I'm sure you would think it's just fine, as long as the government's morals reflect yours, but don't ever expect that will always be the case. It's better that they don't have that power.