The Wagner army of ex-convicts has become effective at taking small areas of territory, at the cost of very high casualties.

Wagner doesn't care about the casualties, because its soldiers came from prison, released to be cannon fodder. Russians don't care how many ex-convicts get killed this way.

I wonder, how many convicts does Russia have that Putin could send to Wagner? How long before he uses them up?

Putin could force any Russians into Wagner, including those who are not convicts. But if he does that, Russians will care whether they live or die.