Even under the idealistic assumption that the exile-location develops some organized society that is kind and friendly and would never engaged in forced labor, at that point it is effectively a separate country and you are exporting your criminals to them. This is not so much solving the problem of handling criminals as delegating it to someone else.
Exile makes sense as a punishment when you have an unpopulated wilderness area and the person is going to live in isolation. It stops making sense when all habitable land is already being used.
Even under the idealistic assumption that the exile-location develops some organized society that is kind and friendly and would never engaged in forced labor, at that point it is effectively a separate country and you are exporting your criminals to them. This is not so much solving the problem of handling criminals as delegating it to someone else.
Exile makes sense as a punishment when you have an unpopulated wilderness area and the person is going to live in isolation. It stops making sense when all habitable land is already being used.