I agree about fines (though that could in principle be fixed by specifying beforehand a very narrow range of things fine money can be spent on); but as for forced labour, your point only applies if the value produced by the prisoners substantially exceeds the cost to house them; if the cost to house them exceeds the value produced by them, your point about regular imprisonment applies instead, and if the two are about the same you deter people without either of those drawbacks. (But yeah, an idea requiring fine tuning is probably not a very good idea.)

Anyway, maybe the best possible solution is something that neither of us could imagine.