Old Crown Heights –
I agree with your main points. I just think that the “highest magnitude” is excessive hyperbole, and Halachically incorrect. The Chillul Hashem would have to be of a higher magnitude when it involves deliberately violating a Mitzvah in public.
It’s silly (at best) to impute our own logic to HKBH. One reason people might do so is to comfort themselves.
Not participating in the census is, for some people, validation of what they were doing anyway.
If the reason for our current suffering were something else, that might affect their lives dramatically. Imagine if, for example, they would have to start actually keeping Hilchos Lashon Hara. This would represent a huge change for many people, one which they may not feel ready to undertake.
It’s easier if the problem is simple, like the census.
It’s exactly the same thing as blaming people who aren’t Torah observant. If it’s their fault, I don’t have to do anything to fix it, I just have to make it clear how terrible they are.