Even the most "normal" person is not exactly a highly rational or compassionate creature all the time. Nobody has a perfect platonic human mind.

Normal people can experience problematic mental states briefly, or under extreme stress.

Mental illness (seems to my uninformed opinion at least) to be more about those who get "stuck" in states for dangerously long periods of time (perhaps even their whole life).

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The question for the criminal justice system is, if you take away blaming individuals as bad/immoral/evil people, what are we left with?

Instead of a system based on punishment and violence, it would focus on protecting society as a whole as the primary objective. Remove those that are an immediate danger, rehabilitate those who can be, and seclude those who can't.

The punitive nature of deterrence has shown over and over to be ineffective at actually reducing crime meaningfully. In fact, it exacerbates crime and hurts everyone else too. But people want to harm bad people, so we continue in a self destructive cycle.