It may also raises the possibility to essentially wipe the victims memory of the crime so unless there is physical damage, it would be like it didn't happen. If it is like it didn't happen, did it happen?

I have encountered suggestions of personality wipe as a means for punishment of criminals, but using memory erasure for victims is a concept I did not consider. I recall a video game that had as its plot devise the skill of editing memory. The game presented a future of memory edition as a world, in which people live vicariously through others' memories/experiences; those who possess or generate unique experiences can trade that commodity for other items. Essentially, a society that has money backed by memories.

My younger self would enthusiastically endorse personality/memory wipes as a solution to overflowing jails and prisons. Back then, I only viewed man as a meat-bag of chemicals, and the state must be frugal with her resources. Even criminals can be repurposed for the benefit of the state.

If we begin to repurpose criminals, then the next discussion would be regarding manufacture of men with atrophied cerebral cortex, diminished pain receptors, enhanced skeletal muscle and bone structure, and neural guidance by A.I. to be used as "workers." Technically, such system can not be considered to be tyrannical, since one can not tyrannize those who can not feel pain . . .