That was the situation here; party A attempts to blackmail party B with revealing the identities of group C to entity D which will then ruin the lives of all people within group C. Is it definitely right or wrong to hire somebody to kill party A? What duty of care does party B owe group C? Entity D exists and is not going away and will continue to behave in the fashion which party A relies upon as the stick in the equation. Attacking entity D directly is suicidal and ineffective.
If party A was directly threatening to kidnap and imprison or murder all the people in group C, I think aggressive action against them would be much less questionable, and effectively that is what they are actually doing, given the behaviour of entity D.
Putting all those pieces in place already, what is the appropriate response supposed to actually be?
Any way you look at it, it's certainly an interesting situation that people who otherwise would think there was no problem here must take into account. It's all well and good to believe the state is a gang of thieves and murderers writ large (disclaimer; I certainly do), and go about constructing a parallel strategy to circumvent them, but that strategy can't just ignore them, or the consequences of their existence, either.