You'd need, I think, to have security guards on hand. Not to stop drug use, but instead to stop violence against other homeless, to intervene if medical attention is required, and so on.
While the costs would be higher than some other solutions, it would be lower (I think) than paying for private housing.
Of course, you'd have to force move people, and that's not going to happen. That is, unless you make squatting in a park a crime, and the result is "you're going to be incarcerated in this very nice outdoor place" the "jail".
Maybe a medical order.
My point is, I don't see an issue with some of your logic. Some people won't transition to inside living, or being close to others.
But if you take people used to living in parks, move them to a park with cabins(tiny homes), and state run water/facilities, the cost might be the same, but they'd have a warm bed, etc.
More carrot and less stick, more compassion and less puritanism might have a chance of working.
The California high desert is full of variations of this in shacks and trailers across the nearly uninhabited expanse.
The biggest problem is support, but if they can navigate enough to get government assistance they can survive for quite a long time.
From what I hear, it is quite successful, giving their residents the dignity and autonomy they need to stand on their own.