Because it's free money for them either way, and they can undercut the competition, even minimum wage workers, due to the 13th amendment excluding prisoners.

The prisoner doesn't really get too much choice in the matter other than taking/rejecting the offer.

The prison could, for grift reasons. They can undercut competition because their costs are lower. If a union, or even a market-rate shop needs to pay, say, $20-hour for labor, and the prison can pay $1-hour (or day) they can charge much less, and then pocket the difference. Their advantage isn't a higher quality product just a cheaper one.

Most jobs in prisons and jails pay less than $1/day, last I heard, maybe they got the inflation adjustment the rest of missed though.

Why not charge the same and pocket a larger difference?

Why would someone buy services from a prison vs an established company. Presumably the quality would be worse and there is a potential risk to reputation. The answer would be because the prison is substantially cheaper due to not needing to abide by labor laws. There are plenty of services where I'd be willing for forgo (some) quality for significant costs decreases.