Two answers:

1. Why should they be restricted to ludicrously low wages? If they're producing something of value, they should be compensated. Not only is it morally wrong to, you know, enslave people, on a more practical level it would be very helpful for people who are leaving prison after serving their sentence to actually have some money saved up, so they have better opportunities, to avoid recidivism.

2. The reason they can sit on their ass and consume what they produce is that they effectively become wards of the state. They're still human beings, and if we have decided to incarcerate them, we become responsible for them, and they still have rights as human beings.

A humble job is fine; I'm not saying they should be sitting in an aeron chair bullshitting on Slack for 8 hours a day. But slavery for pennies on the hour is wrong.