Some fan pages already described Azkaban as a contrast to the so peaceful looking wizard society, as it would have perfectly fit for a totalitarian dictatorship. I must say if I was a powerhungry dictator, I would loved to have a prison like that to put my opposers in... (No I don't want to be one, thank you). If take into account with how much wisdom Fudge reigned over the magic world (or rather lack of wisdom), the dementors did seem well fit, although how crappy Fudge was as a minister for magic only became clear to the reader in full in book 5, especially given the way Umbridge operated under his command, and the way the newspapers wrote about Harry and Dumbledore on Fudge's orders... Of course, this was a good strike by Rowling not to put Fudge's true face in the open directly, as Fudge's bad reign would work out better to use Harry's fame against him once the reader knows the situation a bit better.
Kingsley Shacklebolt was a much wiser man than Fudge ever was, and the fact that the Muggle Prime minister never found out Shacklebolt was a wizard until Fudge told him that, also shows how open-minded he is to the Muggle society and his ability to blend in unnoticed.
Now it's not only out of Shacklebolt's more humane point of view that the Dementors were removed from Azkaban. Due to the Dementors letting all Death Eaters go and siding with Voldemort, the Dementors had proven to be untrustworthy. Since Azkaban is the home of very bad criminals, you must be able to trust your guards fully and Dementors cannot be trusted. I believe Dumbledore already pleaded to have them removed for this reason, but Fudge never was able or willing to listen to REASON, was he?
