There is a reason our prisons are called penitentiaries. The idea was you could rehabilitate anyone to be better. Now, we all know that isn't true. Serial killers are probably beyond help.
Ideally, we should be working to reform people so they don't commit crime when they are released. Give them an education or teach them a trade. Help them break with addiction, or treat the mental health issues (if possible). Our current system isn't great, but I think the US is probably worse. I think Sweden has an interesting idea, but it would be a serious challenge to do it in Canada/US.
As for Chapman, he is a schizophrenia with borderline personality disorder. Can he be integrated back into society and stay on his meds? Impossible to say.