I can see where the court would not want to get involved in telling prison officials how to do their jobs, and I will agree that the 1st and 14th amendment arguments brought forward were really shaky, legally speaking. According to this, the ruling was completely correct on the legal grounds.
But I find the actual rule to be completely backwards. D&D is all about channeling aggression into a fantasy realm. It leads to couch potatoes, not escape attempts or gang violence. You'd think Wisconsin would want all of its inmates sitting around a table, pretending to be somewhere else, rather than actually attempting to get somewhere else. The evidence brought forward for the damages of role-playing games are remarkably similar to those used and debunked during the "D&D leads to Satanism!" panic of the 70s and 80s. The whole thing is self-evidently false.
The other part of the rationale for the rule is to prevent "escapism." The prison claimed that prisoners engaging in escapism leads to being "divorced from reality" and thus violence. Let me be the first to say that escapism sounds damn near necessary when someone knows they will be locked up for the rest of his/her life! Without some kind of escapism, the reality of prison could become absolutely unbearable.
This strikes me as an attempt to keep prisoners down, by making them constantly remember that they are in prison. It's an attempt to chain their minds and souls as solidly as their bodies. But, it's also highly selective. Do the prisons still have libraries with fiction? Do they have television and movies? Why is this form of escapism bad and those kinds acceptable?
Unfortunately, there are very few who will ever speak up on behalf of the convicted, so I doubt this rule will change any time soon. But I can hope.
(One other question: Does this rule apply to all roleplaying games? What about the completely absurd ones, like Toon? Or, if not, why is D&D banned, but not something like World of Darkness or GURPs, which would allow the inmates to actually play at being gang members and criminals?)