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For one, it leads to things like this.

For another, there are two possibilities for the owners of a prison: they are rational, or they are irrational.
If the owners are rational, they'll quickly realize that it makes a whole lot more sense economically to run the prison in a way that people who leave it repeat offend - this makes it more likely they'll be imprisoned again, resulting in more profit for the owner. Plus, there's simply no effective way of monitoring this: you can't monitor every single prison to make sure they're attempting to rehabilitate people, especially given that rehabilitation is a complex process.
If the owners are irrational, what business do they have running a prison in the first place?

There is of course the possibility that almost everyone who owns a prison is altruistic enough that they would try to rehabilitate criminals at the expense of their potential profit. Of course, if altruism were this common in soceity, we probably wouldn't have much crime in the first place - people are, as a rule, greedy and evil. In a similar vein, this.

Yeah, I wholeheartedly agree. Private ownership of correctional facilities doesn't lead to anything good.

I simply can't agree. Firstly, Death Race 2000. Secondly, Death Race. Besides, neither of those links are reliable. The Stanford prison experiment was a crock and that first bitch is a convict, fer chrissakes. Who are you going to believe? A respected judge and a well-to-do prison warden or crack-baby-birthin' prosti-tot?

I believe the prosti-tot. She looked like a nice girl. UNTIL THE BAD MEN RAPED HER IN PRISON AND MADE HER WHAT SHE IS NOW!!

Australia was the first privatized prison, and look how that turned out.

(The side of the argument that I'm on depends on your affinity for Australia.)