Yeah, people get wrongly accused and that is one problem - but that is not the problem of punishment, that is the problem of steps that happen before punishment - police investigation, trials. Yes, thats horrible, but thats an exception to the rule, not the rule. I bet the number of wrongly accused is very very small.
To answer your questions, I really dont know. In my personal outlook (which I know is a bit different from the rest), I do not think that criminals can be rehabilitated (and Im not talking about car jackers, petty theft, I mean more of rapists, pedophiles, murderers). I think the problem is mental, and no amount of physical activity or whatever is going to change that. And that being said - I feel very shady about letting those people back into society.
Take this Austrian Who? for instance. Wasnt it you who mentioned that this horrible crime was not his first sexual offense? He was most likely responsible for raping some other child? The crimes do not stop! And should I add - they get more and more vicious every time. First it was someone else's kid, then it was his own kid....locked up and raped for years and years. If the old f..t wasnt so damn old, I bet he would have moved on to his grandkids next, and God knows what after that!
These people should not, should not be brought back to society. As for althernatives to locking them up for life - we do have them - they are called death penalties, and they should be used more often! And they do work.
I do think that there is hope for those criminals who have committed less serious offenses though. I think they can potentially be rehabilitated, but definitely not in our prisions. In a prison focused on order and labor, like Joe Arpaios. But definitely not the US prisons, where on one side criminal can "chill" all day, but on the other side there is drugs, disorder, and violence, which I think only develop killer instincts and make a stronger criminal.
Who should decide it? Ideally, thats what we have a judge and jury for, but that hasnt been working too well.
As for the revolution comment - I will disagree. I think in a society which has increasingly been going left, one person who takes of and suddenly goes right is all it takes to start a revolution. One man is enough. Now, i didnt say that we are having a revolution - no. but its enough to start one. If one man does that - more and more will follow.