The modern view is that they are sweatshops, and most of them are being shut down. https://www.paraquad.org/blog/lets-reform-sheltered-workshop...
The discussion around it seems incredibly emotional to purposefully distort the opinion of people that ADE/SW are sweatshops or some Dickensian nightmare. I guess profit driven societies have taken advantage of it, like they have with the jail systems, education, law enforcement, military, healthcare...
edited - outcome>option
In short, the DOJ has generally contended in the past decade or so that sheltered workshops represent discrimination based on disability, and has been suing to shut them down or force them to pay their employees minimum wage.
I think this is a problem that doesn't have a single right answer. Either way some people will get the short end of the stick.