One could make the argument that there's a difference between letting people do stupid things that only indirectly and only in certain contexts hurt others (ex spending the rent money on lottery tickets) and letting people do stupid things that by definition hurt others (shooting up a school, smoking in public and populated places) or have a significant liklihood of harming others (driving drunk).

Of course this is always an awkward line to walk, and the definition of stupid is entirely subjective. Most things that make people happy aren't totally "rational".