In a capital case where the prosecution is going for the death penalty rather than life without parole, the trial itself takes longer (more motions filed, more witnesses and various experts called to testify), so costs more. Even so, if prisoners sentenced to death were actually killed right away, that would cost less than life imprisonment. However, there is an automatic appeal if they are convicted, so that means another trial and another couple years. When the defense has exhausted their appeals on the state level and can't get any more stays of execution, they may be able to appeal to a federal court.
In short, 10 years in a high security prison and multiple trials (assuming the prisoner does eventually get killed) cost more than life in prison.
I believe there should be the possibility of early release, to provide hope and reward good behaviour, but it should definitely not be automatic. If someone can prove to a reasonable degree that they have changed for the better, then on their first offense they should be let out. If they re-offend, they should have to finish the remainder of their first sentence before starting their second. Knocking half or two thirds off of everybody's sentence, then releasing a bunch of 'minor' criminals because the jails are full, is a bad idea.
I also think the basic sentence for crimes should be multiplied by the number of convictions (minor and violent crimes counted separately), while early release is divided by that. If you get 10 years for robbing a bank with possible release after serving 3/4 of the sentence, then your second conviction for robbing a bank should be 20 years, with release possible after 7/8 of the sentence.
I didn't mean to imply that some prisoners should be tortured (even if they deserve it), just that death itself is too merciful. This is especially true since prisoners sentenced to die can drag out the execution process and do all kinds of thing to mess with 'the system' and cause further hardship to their victims (and their families). IMO, fifty years or so in a small box, then death, is a better punishment than years of trials and then (maybe) death.