The issue with institutionalization (besides SCOTUS ruling it violates the ADA in 1999’s Olmstead v LC, rendering it illegal for anyone with a disability), is that it’s expensive. That’s why Reagan defunded them all.
To be clear, deinstutionalization was a good idea, but unlike JFK’s push, Reagan pushed for it without replacing institutions with well-funded community services. Which would be cheaper than institutions, most of which sit unoccupied and decaying, so there’s also the question of where Trump wants to put these people.