I dont think that was his plan at all. He simply wanted to settle the vendetta and nothing would stop him. Yeah shittty plan to blow holes in the pace you wanted to secure for yourself, but he did give sheriff and ultimatum, and he didnt take it, so what was left to do? Walk away and try to talk things out again some other day? fuck no!
If the plan was really to have the prison, they could of taken the sheriffs offer and lived side by side and then plan to kill the sheriff later if he was really that threatening. The fucker was a mad man, and you dont reason with mad men.
It was never about the prison. It was all about revenge.