Hanson might argue that execution to free up funds would lead to inevitable unintended consequences.

If you have a more specific version of this objection, could you spell it out?
We know that the current way of spending this money is corrupting: both prison guard unions and private prison corporations lobby for stricter sentences. Taking money from a specific use to the general fund seems to me less corrupting than spending money in any particular place. Of course, loss aversion may cause existing interests to react badly to the removal of money.