Of course one serious downside from the POV of the observers will be the inherent imperfections of any system, and the ability of the “inmates” to discover them

Of course one serious downside from the POV of the observers will be the inherent imperfections of any system, and the ability of the “inmates” to discover them. The result can be overconfidence and over reliance on the “panopticon” without even being aware of the metaphorical drug deals and stabbings going on in the showers. I mean, this how you get a couple of hobbits up in your shit before you know it.