The other problem is that stereotyping an entire social group simply alienates the members of that group. They perceive that society doesn't trust or value them, so in response they don't trust or value society. See e.g. racial profiling in the London Met's use of stop-and-search powers.

If your ultimate goal is harm-reduction, then stereotyping is irrational.

Unfortunately it seems most of the people who I've spoken to that advocate for prosecution-by-stereotype don't want to understand the nuance involved in causing groups to become disenfranchised. In the eyes of the people I've spoken to there is never any reason to commit a crime and if you associate with people who do then you're no better than the criminals.

It's a serious lack of empathy and understanding.