Unless being on "the streets" means running with gangs and/or living in a slum. I'd rather spend those years in jail rather than watch my friends get shot (assuming that I'm stuck in this environment and have come to the conclusion that murdering is bad, revenge is unsatisfactory, etc).
Though I can't imagine a situation where a person is rational enough to choose jail over the streets but not rational enough to find another way out of his current situation.
I've heard anecdotes from most of my friends in Alaska: Outside of major cities like Juneau, it's common for anyone on the streets to spend the winter in jail. Since they can't be jailed without having first committed a crime, they just keep committing some trivial crime that will require their arrest but is otherwise fairly harmless (blatantly stealing a single loaf of bread, urinating in public, etc.)
link: http://www.philosophersbeard.org/2012/07/why-prison-doesnt-work-and-what-to-do.html
I came across this short well-reasoned essay via reddit, but most of the discussion there was by people who (ironically enough) appeared not to have read it. The comment section under the article itself was similar. Some seemed not to have read the first paragraph.
The author's arguments against the imprisonment system, and for alternative methods of punishment, are interesting. They touch upon ideas which are hard to consider rationally. The very idea of punishment is something most people appear to find unpleasant. Indeed so it must be if something is to be considered a punishment.
I found some relevant previous discussion on Less Wrong (Crime and Punishment, The Wrath of Kahneman), and Overcoming Bias (Prison is Cruel), but these seem to be about specifics, and not the system in general.
I am curious both what the scientific consensus is on punishment systems, and what Less Wrong thinks of them. With such an emotionally charged issue, it's hard to find rational discussion about it.