(D) takes for granted that a behavior that sometimes leads to a certain phenomenon cannot also significantly reduce the overall occurrence of that phenomenon
This critic assumes moral socialization increases net suffering because it causes guilt and self-loathing. But what the critic ignores is that moral socialization might reduce immoral behavior overall, and thus reduce suffering that results from that behavior (e.g., crime, harm to others).
So, even if shame causes guilt in some, it may prevent worse suffering overall by discouraging immoral actions.
Therefore, the critic takes for granted that because socialization can cause suffering, it can't also prevent it. That’s the flaw D identifies.
Why E is Wrong:
(E) presumes, without providing justification, that if many people have a negative psychological reaction to a phenomenon, then no one can have a positive reaction to that phenomenon
This isn't quite the flaw. The critic doesn’t claim no one can benefit from moral socialization — only that many people suffer from it. The conclusion is about net suffering, not a blanket statement that everyone suffers. So the critic could still allow for positive reactions, but believes the negative outweighs the positive.
Thus, E addresses a straw man — a flaw the argument doesn’t actually commit.