That's an even stronger argument in favor of prison time for white collar crime because you cannot rehabilitate the perpetrator, you can only punish him.
Meanwhile for someone who is prone to violent behavior it is the opposite. That person still has the potential to do less damage in the future.
The primary reason for its current form is to appease the “fire and brimstone” folks who think that crime must be a result of inherent moral failings that can never be stamped out, so it’s simply what those folks deserve. It’s the flip side of the so-called Protestant work ethic. Go to literally any news article regarding a crime, and there are still plenty of eligible voters who want even more tough-on-crime, as if that has ever solved anything.
For reasons of a systemic nature, people seem to not call for this so passionately for white collar crime or the type of criminals who tend to perform it. There are very rare exceptions like Bernie Madoff but that is the exception and not the rule.
What we have is a vengeful, punishment oriented prison system that is designed to bludgeon people for not fitting in, and also incidentally using them for slave labor.