In answer to the original questions:
1. Yes, it does reduce crime. However, not in the way and amounts its supporters would think. It reduces crime, in that it reminds those with a workable conscience that there are repurcussions. It is possible that even without this reminder, this segment of people would not commit the crime anyway. And if some did, I would think that it would be a fairly minor number. So, I would say at best, that it prevents a fairly minor number of people with a workable conscious from commiting a crime.
However, the type of people that capital punishment tries to target, I would say are the least likely to be affected by capital punishment. The inherent traits of one who ignores or lacks the sense of repurcussion, are the same traits that allow one to commit crimes at the level of murder, especially when premeditation is involved. This type of person would be the most likely to commit a crime, and most probably makes up the bulk of the top level crimes. What makes these people prone to committing the crime, is also what makes them for the most part, unaffected by possibility of repurcussion (such as capital punishment). So, to refine the question, does capital punishment reduce crime commited by those most likely to ? Effectively, no, unless you count the fact that those executed are unable to re-commit.
Capital punishment represents how outdated society's approaches are towards resolving issues. We are much better at making electronics, cloning, nuclear armaments, SUV's, etc.. than we are at managing domestic issues that affect us all.
Each person is different, and the reasons for their being, are different. For those that will still commit a crime under possibility of capital punishment, there is no preventative measure. This is just the way these people are. I think at this point, the government in some way understands this, and uses capital punishment more for its secondary nature: to eliminate the problem. How can we begin to rehabilitate some of these people, if we can't even identify them before they commit a crime. I assert, that if we do not have the ability to identify these people for their traits before they commit, then we do not have the ability to properly rehabilitate. You can't solve a problem, if you don't truly understand that problem to begin with. This results in our current programs that attempt to rehabilitate, which only burden the taxpayer, both in implementation and in re-comitting of a crime. I'm not saying it is unfeasible to rehabilitate. What I'm saying is that there hasn't been enough headway into our finding proper solutions to each individual's problems so that they can be rehabilitated. Look at it this way, if we as a society developed a way to recognize and correct these traits in people beforehand, would we need capital punishment ? And even if it were not possible to identify beforehand, at the very least if we could in 99 percent of the cases rehabilitate a person to not commit again, would we need capital punishment ?
Capital punishment exists because of our lack of ability to identify and correct the inherent problems in some people that are prone to commit crimes. Throwing rocks at it won't help. However, finding alternatives that take into account the true nature of the problem, will.
2. For our current level of development, it is acceptable. Much like how it is acceptable that a dog can lick itself, or does not need to wear clothes. This because they do not know any better.
I hope that covers it