Even Ayn Rand said that government should only be in the military and judicial business, how did we end up to the right of her?
You didn't overall. The idea of left and right politics is a false dichotomy and false mechanistic analogy, but I get what you are saying.
I take issue with even calling these prison co's "private". Corporatist is more accurate. To be truly private there would also not be monopolies on lawmaking... police and judges should all be privatized. Government should be abolished and politician should no longer be a job option.
Those companies who lobbied along with politicians for unjust laws, like punishment for putting any substance in my body so long as I harm none, all ought to be branded criminal and punished themselves. This is the position[0] of consistent, anarchist libertarianism, and those such as myself who hold these positions are not fans of Ayn Rand BTW[1].
[0] http://www.walterblock.com/wp-content/uploads/publications/b...
Were we to abolish gov't and it's geographic monopolies on law and policing, then truly private prisons would both be way less common and nothing at all like what's talked about in the article.
Some of the statistics on crime are outdated but Benson's The Enterprise of Law is a great book to look at understanding the problem here.
Conditions were so terrible before the move for privatization in federal prisons (sometime in the 70's). With a move back toward that system (which would never happen because more politicians' and bureaucrats' pockets are being lined) you might not have quotas and the push for continued prohibition from this one little angle, but gov't is not a business[0], so the comparison to private hospitals or electric companies is faulty.
[0] https://www.youtube.com/watch?v=kqoBZLSm1WA