True as far as it goes, a society doesn't become more 'free' by declining to lock up a murderer. And yeah, to some extent I was just teasing (turns out, if you boast too much about yourself, whether you're a person or a country, others will try to put you in your place - who knew? ).
But as you say, the important thing is why they are in jail. While there may be good reasons, relating to public health or to other things, for banning drug use, I don't think it's absurd to say that putting people behind bars for drug use, or putting them behind bars for much longer periods, makes a country less free than another country, all else being equal (yeah, which it never is).
Certainly agreed on that last point. Some people like to point out that, on a per capita basis, the US isn't even close to being the wealthiest country on the planet. Which is factually true, but only if you're comparing the US to countries with like 1-2 percent of its population, or even less.
Hence my choice of a handful of other large countries to compare to instead. Whether the US ranked first or second or tenth or fiftieth is indeed much less important than how its numbers compare to those of its peers (yeah, it doesn't have exact peers obviously, but the closest you can get to that).
So we may not disagree all that much in the end - a ranking position in itself doesn't say much without digging deeper into the topic. At best it gives you a rough idea, as it does here, but sometimes not even that after you've added in all caveats and qualifiers.
Not the ranking position as such, it is pretty clearly demonstrated by the way your rate is 5 times Britain's and 8 times Germany's, though.