Who on earth made the decision to pay prisoners for blood and not test it? I realise it was the early days of HIV, but enough was understood at the time to make that one of the most evil things I've ever heard.
This occurred before HIV was isolated and identified as the cause of AIDS. There was concern earlier on that there seemed to be a correlation between the platelets products and AIDS cases but they had very little data.
Obviously, I don't know the details of 1970s/1980s plasma products, but I think it's probably fair to assume that they were screening for pathogens they knew about at the time. I think in retrospect it's easy to say that they should have taken the factors off the market sooner, but at the time it was probably a very difficult situation. Hemophilia is an incredibly dangerous condition without treatment and there was a reasonable expectation that people would die without access to clotting factors.