Thanks for your post, daijob. Great question! Let’s look again at the conclusion:
If the GOAL of society is to have happy citizens --> X is a bad principle.
I emphasize “goal” here because it’s important. The conclusion is not about actually having happy citizens. It’s about aspiring to a happy citizenry. It’s ok that (B) concerns what will “likely” lead to happiness (or away from happiness), because the conclusion concerns a goal. We don’t need to know that all citizens will be happy; we only need to know that the society is fostering a climate in which citizens are more likely to be happy.
Best,
Rina