You've got quite a black and white viewpoint, which is fine and is exactly how 'the law' works, hence: "the law is an ass". Many people have a bit of grey where it comes to the less obviously socially costly kind of crimes, often based on their own lifestyle and dependencies, therefore probably on the 'wrongly' side of rightly or wrongly. Usually, I would think the 'grey areas' are on the fringes where the social-effects of the law-breaking are more hidden or second/third order. This is all quite normal and won't change amongst society as a general rule.
What I notice as different, and I'll try to keep this as minimally political as possible but, as you say, it seems to be an increasing irrational tendency to throw the baby out with the bathwater. De-fund the police as an example. I think the positives outweigh the negatives in this example, by a fair margin, but people react to what they're exposed to and the focus on outrage-bait-for-engagement in the current media environment has this an an outcome.
Additionally, the decreasing respect for the rule of law by the leaders of countries only leads their populace into the same kind of thinking. Leading a country backwards from the civilisation that is borne from the application of rules around behaviour and into the chaos that preceded said civilisation (this is a long term process and can be turned around, I'm not saying to start panicking just yet).
Some grey area is OK, and is almost necessary, for the sake of the ability to have the conversation about moving the law to be more in line with societal expectations, but too much grey area leads back to societal breakdown and chaos.