It sounds like you’re missing some things.
Of course, substance possession and other victimless crimes are the useful place to begin.
And it’s crucial to differentiate between privatized prison labor and state prison labor. Privatizing human rights raises a major moral discrepancy as it stands. Profiteering of human rights with forced labor is a fair definition of slavery in my view.
Your argument concerns justice, though. Following emancipation, no time was lost in instituting the strong prison labor system the South known for. When there’s a profit motive, the entire system of justice becomes contentious. If seeking to get murderers off the streets (something I support) it’s critical we not conflate that civic duty with profiteering motives, lest we become the demon, or at least hypocrites. Of course, we popularly criticize the Soviet Gulag system on these same terms, among others.
There’s more, too. Getting a murderer off the streets is a categorically different goal from inflicting punishment or vengance. Getting a murderer off the streets is an easy decision. Punishing them is also widely supported, but still categorically different. If we intend a moral system, we must differentiate and actively acknowledge the difference.