That starting point of the discussion we are having is fiction: it is a proposal for a reform of the penitentiary system, the reform that does not exist and is unlikely to come to pass, at least in the near future.

And in this particular case the movie is but a finger pointing to something. Since it is non-obvious to at least some, I'll spell it out: under the proposed reform jails have strong incentives to not let the released inmates re-offend. At the same time jails have a great deal of control over what happens to inmates in their custody. One easy way to prevent future criminal activity is to cripple people in some way.

Hey, wasn't there a movie about a troublesome guy who got a lobotomy? :-P