And if the bio mom does kick him out? Then what? I knew a lot of kids when I was a teen that were kicked out of their homes and things went from bad to WAY WORSE. And in all likelihood your problems won't end there... a lot of these kids would break into parents' homes and steal their stuff for drug money.
I'm really, really sorry you are going through this, jasper. I was a troubled teen myself, though I had straightened out by 16 and gotten things under control. This was largely due to a change of environments. I had been living with my mom since I was very young, and she let me do whatever I wanted. She was depressed and in graduate school, so she didn't have the self-esteem to stand up to me, and wasn't home a lot of the time. Things got really bad. I was using hard drugs, skipping school, running away, all that stuff. Then, when I was almost 15 I was picked up by the police after running away, and assaulted the police officer. I was put on probation, and then vandalized a church and stole some property. My parents made a deal with my probation officer that if I moved to CA to live with my dad they would stop the probation and investigation against me (I could have been sent to prison, if convicted), so they told me I was going to visit my dad for two weeks, and when I arrived I was told the truth. I was then pretty much locked in my room for a couple of months, and I ripped up furniture, broke windows, got in physical fights with my dad... it was hell. I had a stepmom who was, of course, terribly unhappy with the situation. She often behaved very badly during all this, and refused to attend the parenting classes my dad took, because of an unrelated fight between them. But over the next year or so, my dad and stepmom just plugged away and set forth rules and boundaries that I had never had before. It was a very difficult time for all of us. I was put into an outpatient rehab program which I have to say was actually very detrimental to my whole family, for reasons which would take too long to go into here. I started attending Narcotics Anonymous meetings 3 days a week, which, although I have some issues with the program now, and don't think it was that great of a fit for me, was better than anything else I had gotten and did help. I spent some time in the mountains with my dad and stepmom, which gave me some much needed peace, quiet, and time away from the life I had back home. I started kayaking and attending Buddhist meditations. Over time things got better, I started to value my existence and work towards a good life for myself. My dad and stepmom made plenty of mistakes, and really some pretty bad ones, and it was awful for all of us. But eventually the love shown to me, exhibited by the willingness to go through this hell, won out. It doesn't for every kid in trouble, but it does for a lot.
Keep in mind that he has been incarcerated, which has lasting traumatic effects on people, especially young people. He may have experienced some really awful things in there.
This is a horrible thing to be stuck with, and it is absolutely not fair to you or your children. All I can say is that even though your stepson is acting like a jerk, he needs love and compassion. If you can give it to him, it may just save his life. As long as he is not posing a danger to you or your kids, you may find it worth while to stick it out. Take a deep breath, know that you are not ultimately responsible for his behavior (only he is), and just try to be his rock. It won't be fun, and you will certainly make mistakes, many of which will only become apparent in hindsight. But if you can stick it out and he gets better, you will have the reward of another loving member of your family someday. My stepmom and I have a good relationship, and she is a wonderful grandmother to my kids. We are each others family, and that year from hell, and the still tough year or so after that, are very distant for us.
I would say that khaoskat's advice may be a good one for you, if you haven't done so yet you may want to seek other avenues for help that may not be so permanent. It can be very hard to escape the system once you are in it, but sometimes that's the only thing you can do. I would suggest Al anon and Al ateen for support, there is Tough Love, too, although I have seen that hurt as much as help, so tread cautiously there. If you can get him into counseling that would probably be a good thing, and he probably needs a psych evaluation if he hasn't had one yet. Good luck, remember that you are not the first to go through this, there are many families going through the same thing, and it is not necessarily as hopeless as it may seem.
Mama to 3 awesome girls: DD1 born 2001, DD2 born 2002, DD3 born March 2011