For deterrence, we want the situation to be "not wanted" - how much people dislike being in jail while actually in jail is irrelevant.

A consequence of this that just occurred to me (and obviously, I've not chewed on it long so I expect there are some holes):

In some circumstances, we may make jail a stronger deterrent by making it more pleasant.

Consider, for instance, if jail time is being used to signal toughness and thereby acquire status in a given peer group. Cop shows and the like occasionally portray this kind of thing (particularly with musicians wishing to establish credibility - I think Bones did this more than once). The more prisoners are seen as abused, the stronger the signal. If prisoners are seen as pampered, that doesn't work so well. I have no idea how much this hypothetical corresponds to reality in the first place, however, or under what circumstances this effect would dominate compared to countervailing pressures.