A large part of this is ridiculously long sentences. You called out California's three strikes law in you comment. One example of this I heard on the excellent Ear Hustle podcast was somebody who was sentenced to 50 years to life for stealing $40 (unarmed) after having two prior convictions. I don't see how this is good for anybody.
Under the Islamic Sharia system, the laws are very harsh - you steal and your hand is cut off, you rape someone and you are stoned to death, you commit adultery and you are publicly lashed and so on.
But the Sharia also allows the victim (or their relatives) to forgive the perpetrator (with or without some compensation, usually money) in the spirit of Islam.
The American criminal legal system tries to model something similar - and that is why the punishments for most crimes are absurd too; for e.g. US courts sometimes award absurd punishments of 200 years of jail time. Like the Sharia system, once punishments is awarded and carried out the system ensures you end up broken (in spirit, if not physically).
Where as in a Sharia system the victim decides on being compassionate or a "fair" compensation in lieu of a lesser punishment, in the US system this power is held with the government. And this is used as a bargaining chip to make "deals" with the accused (note that I don't say the guilty, as sometimes even the innocent make such deals afraid of the harsher punishment if they were to lose the trial).
(From what I have read, some of the founding fathers of the US were admirers of the Islamic empire and their political and legal system influenced by Islam).
If that is the case, society then needs to start looking at other incentives (carrot & stick) that can limit the risk of re-incidence, such as better reintegration mechanisms.
While I generally agree with the rest of the items in your list, prison is the second best place for mentally ill offenders, with a dedicated psychiatric hospital being the best option if available. The problem is that they're isn't space at psychiatric hospitals--they're always at capacity.
Most of that disparity has been created since the Reagan administration's "war on drugs".
Drugs aren't harmless, and we shouldn't pretend like they are. Nor should we operate under the fantasy that treatment and rehabilitation are enough. Many of the mentally ill in prison are mentally ill because the drugs they abused ate holes in their brains, which is something that no amount of treatment will fix. When I was a public defender, the % was about 75% of MDOs were drug-induced mental illnesses, with the remainder being inherent (i.e., genetic) or trauma-induced mental illness.
Agreed, but IMO the "war on drugs" has caused far more damage than drug abuse. While there are recreational drug users they tend not to be drug abusers. Rather drug abuse usually tends to be caused by erroneous self-medication. We could help these people.
The war on drugs tears our society in half by forcing people who might otherwise use drugs in a recreational manner into a counter-culture where they feel alienated. This alienation leads to mental health disorders which are treated through self-medication which causes even more problems and a vicious cycle begins.
The case for abolishing prison entirely is distinctly tenuous, but there's a fairly obvious case that the US criminal justice system is needlessly costly, cruel and ineffective. Most of the arguments in defence of the status quo are tacitly racist, e.g. "European countries don't need to imprison as many people because their population isn't as diverse".
Prisons may be a necessary last resort to protect the public from violent criminals, but the US criminal justice system is riddled with genuine abominations - Three Strikes laws, plea bargains, private prison contracts with minimum occupancy quotas, the high proportion of seriously mentally ill inmates etc.