The Limits of the Death Penalty part 2

In my last post, I said that if the death penalty is used to deter crime then it shouldn't be used to deter rape because then the state would have no additional penalty to discourage murdering rape victims. But what if the death penalty does not discourage crime? As suggested in this Freakonomics post, capital punishment is issued so rarely that criminals reacting to the probability of receiving the death penalty could not rationally be deterred by it.

That being said, does the death penalty serve a function aside from discouraging other would be criminals? Judging by the reactions of the presidential candidates to the Supreme Court decision, the death penalty functions not only as a deterrence for other crimes, but also as an expression of society's disgust for the most heinous of offenses. Is this function reasonable enough to continue administering capital punishment?

Though its impact on society at large is questionable, the death penalty does deter convicted criminals from committing further crimes.  Watching MSNBC's Lock Up has made me wonder if executing gang leaders serving life sentences for initiating the murders of other inmates would be an effective (or ethical) policy to deter violence within prisons.  At minimum, executing gang leaders would prevent them from promoting more violence, but it is also possible that gangs are a limited access order that minimizes violence, and upsetting the order that gangs establish would lead to chaos and greater violence.  

(Barry Weingast Gives a good description of Limited Access orders in this EconTalk)