I have to agree. This is a clever way to catch criminals that doesn't particularly harm non-criminals. I'll take this over the anti-encryption campaign the FBI has been on for the past 10 or 20 years.
The problem is that these things go hand in hand. The criminals wont buy from the poisoned channel if they can get the security they need from the standard consumer models. If you go to T-mobile, and you get the option everyone gets and it is end-to-end encrypted properly and there aren't any remote exploits then the criminals will just use that.
It wasn't a good choice if you're privacy-conscious anyway, since there was no source code available, so you couldn't check it actually does what it claimed.
Innocent (and clueless) people seeking privacy had their privacy violated by this action.
You state this as fact without any proof. The AFP and FBI assert that 100% of the users were engaged in criminal activity. Given the distribution method, which included vetting by a known criminal organization, the requirement to have an account created by administrators that are again known to be criminal, and the ability to only contact others on the same network, I tend to believe that assertion until I see proof otherwise.
Don't take cop statements at face value unless they're proven in open court.
If you're not familiar with the US policies around such things, lying is part of the job for police there. Most cases end up in plea bargains, which allows prosecutors and cops to avoid having to actually prove anything in court to secure a guilty verdict as part of a plea agreement.
Very few police accusations actually end up being proven with evidence.