Let's not lose faith in rehabilitation before we've actually tried rehabilitation.
First, not everyone has close friends and family. Second, dysfunctional families and bad friends are absolutely a thing and can even be the cause of problems.
Friends and family can be an important part of rehabilitation, there's no doubt in that, but I don't see a reason to abandon people just because those have failed them, if they even had them available to rely on at all.
> why would one expect a monolithic system to do any better?
Because such systems have the resources available to hire and manage trained professionals. What in particular do you think makes a monolithic system unsuitable for solving the problem of effective rehabilitation?
So many "criminals" don't need rehabilitation cause they haven't done anything wrong, anything rehabilitable.
The actual dysfunctional people are small percentage.