Morals and Halacha

Rabbi Yochanan said that Jerusalem was not destroyed except because they based their words on the law of the Torah and did not act before the law.
Could it be that he believed, like you, that there is a disconnect between morality and law?
From a Torah perspective, you behaved one hundred percent excellently towards each other, but from a moral perspective, you did not, and that is why Jerusalem was destroyed because of you.