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Because it sets up incentives for whoever benefits from the labor to lobby for stricter crime laws regardless of whether those stricter laws lead to less crime in the long term.

This is a problem with crony capitalism, moreso than the philosophy of rehabilitation vs punishment.

Because we tend not to like slave labor in the modern world. Using prisoners for slave labor creates perverse incentives to enslave more people, and keep them enslaved longer.

Call me old fashioned, but I don't think law abiding citizens should bear the burden of those who break the law.

If people outside those prison walls are forced to get a job, then the people inside those walls should be no exception.

Please read the article, it addresses all of your points and should help you understand.