Simply put, T-Bag was a dick. He was always in it for himself. And when he was gonna rape Sara, well I'm sure that didn't endear him to Michael or Linc.

Is it really that hard to understand why the writers did not make it so the known convicted pedophile/rapist/murderer goes free at the end? He ended up in jail because having a pedophile's slate wiped clean after he escaped two prisons, murdered at LEAST a dozen people while on the run, and attempted to rape the protagonist's girlfriend -- proving he hasn't at all redeemed himself or changed in any positive manner -- would undoubtedly rub people the wrong way. I'd say it's pretty obvious why T-Bag ended up back in prison at the conclusion of the series.