The Corrections Corporation of America noted this as a risk factor in their 2011 10-K filing.
"The demand for our facilities and services could be adversely affected by the relaxation of enforcement efforts, leniency in conviction or parole standards and sentencing practices or through the decriminalization of certain activities that are currently proscribed by criminal laws."
Drug sentences are only part of the problem. Many violent and non-violent crimes carry far greater sentences than they did in the 1970s.
Extremely high sentences do several bad things, first, they normalize giving extremely high sentences so relatively a 3 year sentence seems low, when in reality, that is nearly 5% of someone's life. Second, large sentences force otherwise innocent people to plea out of charges because the risk is simply too high.
