As Vince has pointed out, the Norwegian system has very low incarceration and recidivism. Most nations could learn from it.
The reason for keeping Breivik in prison is to keep society safe - and I think this is pretty much the only reason. Retribution is not ever an acceptable reason for incarceration in most British and European systems of justice. Deterrence is increasingly problematic as a concept as the growing view is that we must not use people in this way. Rehabilitation may be a benefit which comes from sending someone to prison, though I'm not quite sure how this works in the Breivik case.
The usual expectation of people convicted of murder (in the UK and I gather in Norway) is that the time will come when they are not judged a risk to society and are released, with safeguards in place. The safeguards are becoming more sophisticated. For example tagging is possible, so that someone can be monitored 24/7, along with curfew and restrictions on places that can be visited. In 21 years' time a Norwegian court will look at the Breivik case and, if they feel the public can be kept safe with whatever technology then exists, they may well release him. I don't accept that he is inevitably behind bars for life.
The crime is of a magnitude where punishment is not possible. The key concept is safety.
What makes me uneasy is the finding that Breivik is sane. Somehow it would be a lot easier to consider him insane than to grapple with the idea of a sane person deciding to do such evil things.