To hold criminals responsible for their crimes involves a failure to

I think the gap here is that the prompt is initially pointing that criminals are created by the actions of the citizens, who are themselves living in the same environment and then in the very next line the prompt calls these citizens 'law - abiding' as well.
Hence if they are following the law to the letter, how can they create an anti-law entity.
If a criminal, or an anti law entity, is getting added to the system by citizens who are following the law, then it is indirectly concluding that the law itself is introducing the anti-law and not the citizens.
Hence IMO E should be the answer.

[quote="Bunuel"]To hold criminals responsible for their crimes involves a failure to recognize that criminal actions, like all actions, are ultimately products of the environment that forged the agent’s character. It is not criminals but people in the law-abiding majority who by their actions do most to create and maintain this environment. Therefore, it is law-abiding people whose actions, and nothing else, make them alone truly responsible for crime.

The reasoning in the argument is most vulnerable to criticism on the grounds that


(A) it exploits an ambiguity in the term “environment” by treating two different meanings of the word as though they were equivalent

(B) it fails to distinguish between actions that are socially acceptable and actions that are socially unacceptable

(C) the way it distinguishes criminals from crimes implicitly denies that someone becomes a criminal solely in virtue of having committed a crime

(D) its conclusion is a generalization of statistical evidence drawn from only a small minority of the population

(E) its conclusion contradicts an implicit principle on which an earlier part of the argument is based[/quote

It’s a flaw type question. Hence fact test must pass for options.
using POE, in option A , there is no ambiguity.
In option B , there is no mention of social acceptability in stimulus. Hence wrong.
Option C talks about distinguishing how criminal becomes . Also implicitly is wrong as per stimuli. The conclusion explicitly states who is responsible for making them criminal. Hence option C is wrong.
There is no statistical evidence mention in stimuli so option D is wrong.

That make option E correct choice.

But I still wanders how is E the correct.

Criminal NOT responsible for their actions..
Why?
Because their actions are product of good citizen's actions.

But why can't we think on the following lines? -
Have we considered why good citizen's actions are like they are? Probably influenced by the very environment - to prevent criminals from harming them for example?

E says exactly that -
(E) its conclusion contradicts an implicit principle on which an earlier part of the argument is based