There are two arguments for prisons: punitive and preventative.
Regarding the second, preventative, it is fairly clear that locking this woman away would not prevent any further crimes - she has not done anything in criminal (apparently) in over 30 years. There would be societal benefit to putting her away.
Further, if she IS innocent and wrongly charged (as she claims), then there's no reason to put her away at all. If she is guilty, she has proven that it was a mistake that she will not repeat, so no one is in danger because of her being free.
Regarding the first, purely punitive, then you are right, but I would argue that punitive prisons are a backwards notion that does not serve society in any way - this is essentially societal revenge, which does not sound like a reasonable way for society to exist. There is such a thing as forgive and forget - but ONLY if it is clear that the person will not do it again. People make mistakes, people can get crazy, and people can be wrongly tried. If it's clear that the person is no longer a threat to society, then (this is not a rhetorical question) what is the point of locking them up? Who does it benefit?