Hmm... dormitories, the auto-search cell policy(for when prisoners commit a wrong) does not work for dorms. This is pretty dangerous if you are not draconian with finding contraband/tools.... especially for a person like me who loves to scale things up on the macro level.
I didn't realize that till almost too late... saw that many of them had a need for sleep. The +100 prisoners were digging and already right under the 2nd(and final) set of perimeter fencing. Of course, they instantly started rioting when I found the hole. They were put down, surprisingly without any deaths, but then I was just starting out with lowsec and my armed guards were holed up at the armory and the solitary block.
On the other hand, Holding Cells do get auto-searched now. (I don't remember them getting auto-searched before Update #1.) Typically, the holding cell searches are triggered at minimum 3 times a day... the amount of contraband that gets in there is ungodly, despite 1 layer of metal detectors. (Holding Cells do not dig tunnels.)
350-ish prisoners in a 250-ish capacity holding cell. Totally works. Not all of em sleep anyways.
Current Dorms: 3 layers of metal detectors into the dorm room, with dogs patrolling the toilets. So far, it has worked. No tunnels since. (Dogs seem to be more of a placebo effect and for smelly contraband as always... for my hands-off playstyle anyways. Though, the extra help in rotating out into solitary probably does its part.)
Conclusion: Dorms are pretty awesome cause it also fills in the privacy need, despite the tunneling risks. I probably need to do the math, but I think it is more efficient then a 1x3 type cell block of similar size... (Though, doesn't hurt to still have a buncha 1x3 cells to bring down the average cell quality... anyways, seems to be one dorm, regardless of size is counted the same as one 1x3 cell.) [Or if you are cheaty, dot some far off corner with empty 1x1 cells.]
Holding Cells are still the be-all end-all masters of efficient prisoner housing... doubly so with bunk beds.
Other Notes:
I've resigned myself to playing on the small map, since the game slows down significantly in medium-large once I get near 500 prisoners. It has been a challenge.... fitting stuff in as I'd normally like to. I've torn down and rebuilt some sections a number of times just to get things right and I need to find a way to fit in two more 250-ish capicity holding cells for medsec and maxsec before I can really let more of them join in. ... though, that number of prisoners may be overkill considering I have dorms with 60-ish capacity each too.
At the least, both the kitchen and canteen are perfect as they are. 300-ish seating capacity canteen(which could actually service probably 400 to 450-ish in a 2 hour slot if you have other need fulfillers to distract, 3 separate eating times of 2 hour slots each, per day) and the kitchen supposedly could feed 500-ish on high/high, so says the PA calculator.
EDIT: Huh, the PA wiki says Dorms don't fulfill privacy need.... but... I'm not seeing a lot of people with high need for privacy in my dorms... And some of these people are old... but... my luxury solitary cells might actually do it for them... The rotating solitary doors is the winner? I give 48 hours for possessing a tool...