I have my doubts as to whether that was the real driver or just the scapegoat. The real driver was probably the direct costs. Abuse existed, but the alternative is all of these people living on the street.
Isn't a better alternative to give people free access to early intervention (especially early intervention in psychosis services) and free access to treatment in the home?
I don't know the larger picture, but from my personal experience that would mean lots of adult schizophrenics (or similar) living with their parents. The sad fact is that there are just a lot of people that can't manage on their own. In today's system they are all homeless or in jail.