The argument is that though the conviction was wrong, it wasn’t unreasonable- there wasn’t a perversion of justice etc.
I don’t buy that as a reason not to compensate, myself- sure, a wrongful conviction isn’t as “bad” as a false one but the result is the same, time wrongly spent in jail. That’s properly life-changing, life-ruining in fact. You can’t fix it, but the least you can do is try.
The fact that he’s a wrong ‘un doesn’t come into it in the slightest, IMO.
I think it was the Mary Whitehouse Experience that suggested if you wrongly serve time, you should be given a shopping list of offences and tariffs and be allowed to commit offences up to the value of your time served…