1. I agree that there's no spec, but we have to be careful about what we call subjective. "Broken" may be defined with respect to ideas that emerge from our subjective experience, but ultimately it is the result of certain facts about the world (the person's brain, their circumstances, their experiences, etc.), and can be assessed objectively in terms of how far away one is from whatever best- or worst-case scenario we define.
2. I agree with you on that point. I would only add that, properly accounting for all factors, I don't think rehabilitation necessarily nets a higher cost. The more resources you spend on an effective rehab program, the less you have to spend compensating for recidivism.
3. Simplification, I'll accept. Oversimplification, I'm happy to debate (although preferably by PM, since I suspect it'll cause us to run afoul of the RSP policy).