There are many arguments pro and con, mostly about what helps defendants in mental health courts, and what the price tag or savings is in tax dollars. But I see very little, if any, discussion of a more basic jurisprudential problem, namely the medicalization of crime. This involves fundamental social risks and costs, as much as outcomes for individual "mentally ill" defendants.
When we believe a defendant should be treated for mental illness rather than punished, we assume one or both of two propositions: 1. punishing people doesn't benefit society as much as treatment; 2. mental illness caused the defendant's misbehavior or otherwise made him or her not culpable.
I'm not interested in the first of these propositions now, except as it may be monitored by the second.
In some circumstances, we don't and shouldn't blame people for their behavior. If a man is forced at gunpoint to drive while drunk and there's no accident, a DUI citation would be gratuitous. If a recently returned prisoner of war has a terrifying nightmare and unknowingly slaps her husband in the middle of the night, she probably needn't be prosecuted for domestic violence.
The trick has always been where we draw the line. I just think we've gone far, far beyond what makes any social, ethical/moral sense. Culpability itself can never be a scientific medical question.
Criminal defense attorneys say the "not guilty by reason of insanity" defense is now a tougher sell to most juries than it has ever been. Everyday people don't believe psychiatric expert testimony, and psychiatrists are always available to contradict each other anyway, as long as they're paid by whichever side. Public cynicism is thus very deeply ingrained. Mental health courts may really be an elitist scheme to bypass traditional "unenlightened" popular justice.
Compassion, tolerance and leniency toward bad behavior can quickly become an unaffordable luxury if times get hard and violent. Forensic psychiatrists, and all medical professionals, had better hope that mental health treatment regimes work extremely well (which they certainly do not!) with increasing acceptance and fanfare over mental health courts.
The more crime is medicalized, the more the medical profession will own it and be blamed for it's continuation or increase.
Unfortunately, if this goes badly it may also strike directly against public confidence in the rule of law, or even in rationality as an appropriate quality of public policy.