I'm confused - are you saying the only reason to incarcerate someones is because they pose a danger to people around them? So white collar crimes should not result in jail time?
No, that's Rand's line: They're in jail because they're dangerous. He completely ignores that aspect.
When the stars threw down their spears
And watered heaven with their tears:
Did he smile his work to see?
Did he who made the lamb make thee?