So much the better for Sundown's world, then!
But I'm not persuaded the quotas have the effect you seem to believe they have. If there's no difference in the cost to the state between a full private prison and an empty private prison (after penalties), then it would still make financial sense for the state to leave the private prison empty rather than shell out even more money to needlessly prosecute someone and send them to the private prison.
EDIT: In fact, having a quota in place removes the incentive from the prison operator to have laws that result in higher prison occupancy--they get paid one way or the other, but with "the other" way, they don't have the expenses of housing as many prisoners. But under an approach without quotas, while it's still to the state's financial advantage to have as few prisoners as possible, the prison operator has an incentive to have as many prisoners as possible--which means they may lobby for more strict criminal laws or lengthier minimum sentences.