There are some stories, not much proof as is usually the case with such things:
The popular story seems to be that hemp growing was outlawed primarily as a result of "yellow journalism" (i.e. sensationalist journalism for the purpose of advancing a political agenda) on the part of William Randolph Hearst, a newspaper owner who also happened to own paper mills. Hearst's papers printed outrageous stories linking violent crimes to the use of marijuana by members of minority races; this was probably the origin of the "reefer madness" myth. It is assumed that his interest in demonizing hemp stemmed from the fact that hemp paper could theoretically be made with less cost and fewer problems than wood paper, obsoleting his company's capital investments in paper-processing facilities. Supposedly, DuPont also had a stake in this due to the fact that their patented chemicals were used in wood paper processes, and the emerging hemp paper processes apparently did not require nearly as much. I've never seen unbiased documentation of this version of history, and it has some of the earmarks of an urban legend. However, I've also never seen anyone refute it.
The other major theory I've heard is that the politicians won't dare legalize marijuana, both for fear of backlash from some groups and because it would be a massive blow to the private prison industry - marijuana is arguably the most commonly used illegal drug, and drug charges are responsible for a substantial portion of our prison population (exact numbers vary by year and by who you choose to believe, but nobody's saying it's a small chunk).
Personally, I think the whole notion of "drugs are bad" is pretty ridiculous. I myself would not choose to use recreational psychoactive drugs for personal reasons, but the anti-drug campaigns seem to be mostly based on cultivating irrational fears. If you're to believe the propaganda, doing "drugs" (it doesn't matter which one; they're all the same) will turn you into a social outcast, put you in a coma, destroy any hope you had of an economically sound future, fry your brain like an egg, financially support the evil terrorists, etc. I don't think that recreational drug use is necessarily a good thing, but the War on Drugs (alcohol, tobacco, and patented prescription drugs don't count, of course) seems to cause more harm than good. One of the latest ad campaigns tries to support the notion that "drug money" goes to terrorist organizations. Gee, that couldn't possibly be because they're illegal, could it? Never mind that there's no need for an international marijuana trade infrastructure - it grows damn near anywhere last I heard. I guess it should just be chalked up to Bush trying to tie every damn political issue he can into The War on Terror (just so people don't forget what a great leader he is come 2004, I guess).