can you say honeypot?

Yes, it would be legal, or at least, there are entirely legal ways for the U.S. government to do it under U.S. law.  The technical issue would be the difference between "entrapment," which is not permissible, and "enticement," which is.

Not to get too technical, the general principle is whether law enforcement basically goes out and gets people to commit crimes they otherwise would not have committed, or whether it simply provides an opportunity for them to do what they would otherwise do.

An example of the first would be John DeLorean of the DeLorean Motor Company, which made the car that ended up as the time machine in Back to the Future, which you probably remember if nothing else.  His company got into serious financial difficulty and basically, an FBI informant came up with a scheme to involve DeLorean in a cocaine trafficking scheme.  DeLorean had never done anything like this previously and almost certainly would not have without the feds basically exploiting the financial mess he was in to get him to participate in a crime.  Essentially, the defense was that there would have been no crime except for the actions of the feds themselves, and it would be unfair to convict DeLorean.  He won that argument defending himself.

Depending on how it shakes down, the guy accused of being DPR might have a defense on the "hit man" things based on entrapment.  We don't really know any more detail of how that happened other than what the feds put in the charging papers.

"Enticement" is different.  A simple example is the undercover vice cop dressing like a prostitute in an area of prostitution, who is approached by a man for sex, negotiates it and then arrests the john.  Or a controlled buy situation where an undercover informant purchases drugs from a suspect then arrests him.  While there are a lot of technicalities about this kind of thing, at bottom, the issue is really whether the defendant would have been likely to do this or something similar anyway, and that the enticement merely got them to get caught.

I think they could legally run a honeypot operation.  If the original SR vendors and customers came back and managed to get caught and get evidence on them based on such an operation, I'm pretty sure it would be admissible and that both the evidence could be used in court and they could actually be convicted of whatever new offenses they commit on the new site.

Now, my personal guess would be if the feds wanted to operate SR as a honeypot, they might have preferred not to shut it down in the first place, but if there was really an issue of DPR potentially going around having people killed, they might have chosen to cut the operation short, since it was obviously finished the moment they arrested and unsealed indictments.  The question really becomes whether they'd essentially run what is likely once again to become a large drug operation in order to do a sting.  This isn't some controlled buys.  It's reopening something they made a lot of news releases about shutting down.  If they do it and something goes really bad, careers would end.

So my guesses are:

A)  It'd be legal for them to run such a sting and its evidence would be admissible; but
B)  It'd be a really bad idea.  And could easily go out of control.

None of this is intended as legal advice and nobody should rely on it for that purpose.  It is largely guesswork based on incomplete information.

Either way, even if it was a USG-honeypot, the rest of the world wouldn't really give a shit. They would still be buying drugs of each other outside of the "honeypot"-jurisdiction.