Imagine, hypothetically, that all sin is permitted, and that 100% of govt. is supported by sin taxes.
As a result, people who don't sin don't pay any taxes. Nice deal, right? Maybe not.
Is it moral to have a policy that forces immoral people to assume the full costs of their immorality? Obviously yes. But is it moral to have a tax policy that forces immoral people to assume the full cost of everything? In my view the answer is 'no'.
I think it is also immoral to permit bad behavior generally. The Bible says that immorality is not a free choice but is rather a form of slavery. Do we want our country to be emancipated from this slavery or not? As such, this aspect of libertarianism does not produce liberty but rather its opposite: bondage.