Not sure everyone is aware, but CA is a "3 strikes, you're out" state. That means that if you have 3 felony offenses no matter how minor or non-violent, you are sent to prison for life. A man got sent to prison for life for stealing a pack of diapers there. Giving their son one strike in that system, not to mention what jail does to people, is not the way to go. I think they took the right course as far as pressing charges/jail goes.
By the way, jail is only a "natural consequence" in that parents don't set it up themselves. It's still a punitive/unnatural consequence set up by our system. It's not aimed at rehabilitation, treatment or prevention - but at demonization and humiliation/punishment. Some people come out of it a better person - those lucky few who are strong enough and persistent enough and discover god or politics. But the vast majority of people who enter it are made worse and are destroyed by the experience. It will not "talk sense in to this kid".
The bigger questions are not being asked. Why is he stealing that kind of money? What is he using it for? How did he get to this place? And what can be done to help him out of it? Now that the parents have bought themselves some time they need to be figuring those questions out. Not sure if that's there mindset given that they are "just trying to get through to graduation". 17 1/2 is still very young and people have a lot of time to make themselves who they want to be; the parents should try to play a role in helping that process.