I agree with your point that attempts at cheating are inevitable, the rest is confusing though:

We have a long and storied history of coming up with extremely disturbing capitol punishments performed in public, and yet those punishments coexisted with much higher rates of criminality then now.

Stealing from the church in history carried some pretty gruesome deaths, and yet plenty of people still stole from the church, etc.

People are chronically bad at transferring future risk to their current decision making. Any consequence that relies on people being able to model a future problem against their current desires/needs is always going to have a lot of transmission losses. You end up trying to make ever more horrible punishments to overcome the losses in transmission.

I think the goal should be the smallest possible functioning consequence, which is possible by being close to the 'crime'. The very best way is when community can do it immediately. Like if someone does something fucked up, but then their buddies go 'that was fucked up dude', I am very confident this will prevent then from doing it again much more efficiently then a distant jail sentence. (among all the other ways too, there's never one clean action to take to solve problems on a societal level)