[Xaccers]

Prisoners don't have free range access to the internet.
They can't go online whenever they like, they can't access any sites they like.
You can pootle along to the library during you lunch break if you work nearby, or head along there in at the weekend.
The fact remains, you have access to the internet.
If you were at work, you wouldn't be able to use your home internet access either.
Prison's purpose is to act as a deterrant, punishment and rehabilitate.
The lack of an effective policeforce and courts counters the deterrant factor much more than any percieved "luxuries" do.
If people actually believed they'd always get caught and sent to prison, even with TV's in their cells, there would actually be a reduction in crime.
Problem is people know that a) they aren't likely to get caught and b) aren't likely to be sent to prison for the majority of crimes.
Prison punishes people. I've known people who went to prison and young offenders institutes, and none of them want to go back. Their belief that they weren't likely to get caught or be sent back negated the aversion to prison and so they continued to comit crime, getting away with it or just getting slapped wrists (re-inforcing their belief that they'd not go back to prison).
Rehabilitation is seriously lacking in UK prisons, it costs lots of money, not everyone is responsive to it, and not many people want to go into providing it. Add to that the low average length of sentence, it makes it even harder to do.