Hello yooper01,
It sounds like you're making the right decision regarding not bailing him out. Only he will know when he's ready to stop using and as much as you may want him to stop he may be far from ready. If he gets prison time hopefully the facility that he ends up in has substance misuse programs he can attend.
You're not a bad parent. The only reason he is saying that is because you are no longer enabling him. Throwing in the towel may be the best thing you can do for your son right now. It's going to be really difficult but if you cut yourself out of his life he may hit bottom faster. He may not. But not enabling him is a positive step.
Natom