That's pretty much my thinking too. I don't care what they do with the money. They can buy a happy meal, or a bottle of whiskey. I don't care. Whatever helps get them through another f'd up night.
As far as hard core junkies go.. well no.. I'm not going to support their habit with my hard earned money. I wouldn't even do that for a close friend. Like someone else said, you can spot the junkies from the people that are genuinely down on their luck.
I think we all have a social responsibility to help our fellow man in whatever small way we can. That's a basic lesson taught in both the bible* and qur’an. I'm not so self-righteous that I'll only let a homeless person spend the money I give them in ways I deem morally acceptable.
I'm atheist, but religious texts do often contain some decent moral guidance.