I have no doubt prison has these sorts of effects but I have a strong sense the reported effects are exaggerated. What do you think about the design of the analysis (click through the link in the NPR piece to the journal article - there's info to glean even fom the abstract).
I've spent a lot of time in the NLSY. There are about 9,000 youth in it, so when they refer to "tens of thousands" I think they mean across multiple waves. Only a small portion of these youth are ever incarcerated - it was so small that my co-author and I couldn't do much with it when we were looking at employment rates for young adults. So that's an issue, but what else concerns you here?
UPDATE: I should add - the author may very well have listed all these limitations in his article. That's not unusual at all and in my mind it's perfectly appropriate: dig up what you can and qualify the hell out of it. But this NPR report does not seem to have the same caution.