Do video games have the potential to becoming an acceptable enough outlet for maladaptive behaviours? If they are of a successful quality of emulating more realism and injecting more stimulation to our senses that even the most sadistic and prolific killer prefers that to the real thing?

If so;
Could we also form an ethical life and consented sentence for criminals incapable of not committing crimes in the real world by just getting them to agree to go to a place where they can do whatever they want for the rest of their life, free of real consequences?

Possibly, though I am not Sure whether there is such a thing as an outlet for behaviour. Repeating a behaviour that you find rewarding will usually reinforce that behaviour, so there's a chance this would make bad tendencies worse.

- @“Echarmion”

Excellent point to raise!
Let’s imagine that people agree with what I have posited. Imagine you could put a sadistic killer into an RPG like environment. They can be offered stories and choices in those stories. Sure they might just go around killing people in the simulation. However if it’s consequence free, they can do this until they inevitably get bored and have purged and talked through their actions, behaviours and world-views with therapists and what not the entire time. While the explore and roam option is based entirely upon the participants free will, we can design stories with forced options and preplanned consequences for those choices through dialogue options and scripted events. Some stories can account for more diversity of choice while others may be more rigid forcing hero or positive roles on patients and emulating failure by denying more of the story if none of the script options are obeyed. People will inevitably get bored of anything and this is especially true of those who fit the criteria of anitosocial personality disorder. They can ignore the stories and forced narratives for awhile and ignore the therapists for awhile.. they will get bored of it though, especially if the therapists have control of how much free will and choice the patients are able to practice and what roles they are allowed to play and repeat. Over time you could turn access to the bad behaviour into a type of reward and bring it down to a level where so long as the person can live amongst the general population with nothing more than prescriptions of habitual gaming.

Probably not a full proof endeavour as nothing is really. However, if a patient shows they want no part of a minimum behaviour standard for reentering society; how bad is it for them to stay in a video game and how is it worse than solitary confinement?

Is anyone familiar with the concept of “The Justice Zone” from the British sci-fi comedy Red Dwarf?

It’s a type of prison system where if the inmates commit any act of injustice, the consequences immediately happen to them. Try to set something on fire, you only light yourself on fire. Steal something, and something of yours is taken. Hit someone, you feel the pain. Try to Kill someone, you die.

Inmates would stay in the justice zone until good behaviour became second nature or they served their sentences and it was assumed it would be second nature by this time, or just had to stay in the zone bored for the rest of their days.

Can we create the Justice/Karma Zone soon?