Actually, I'd say there's only one reason for the existence of prisons: confinement. As in, removing someone who could otherwise present a physical threat to others.

Prisons might be a deterrent, but locking up people who never caused physical harm to others is insane. Those should be alternate sentences.

Re point "a", it doesn't make that much sense. Why would they be permanent? It should be permanent for very serious offences (murder etc).

For minor offences I agree there shouldn't be a case of imprisonment. I'd send those people to do some community work and maybe learn something good from it.

Because if you don't want to rehabilitate them (i.e. acclimate them to world outside bars), what's the point of releasing them back?