Elizabeth believes that her husband, John, still has feelings for Abigail Williams, and so she is afraid that the reason he hesitates in revealing Abigail as a liar is that he doesn't want to see any harm come to her. The stage direction says that, as Elizabeth utters the line you've cited, she does so "with a smile, to keep her dignity." The thought that her husband loves another, still, is so devastating to her, but she has also just uncovered a lie he'd told her: he said he hadn't been alone with Abigail when he was in town, but she's just learned that he was. She cannot totally trust him, and he senses it.
After Elizabeth speaks, John tries to object, and he eventually responds with a "solemn warning" to her not to judge him. Perhaps John becomes so defensive precisely because he knows that he still has feelings for Abigail. When he'd spoken with the girl in Act One, he'd admitted that he still thinks of her "softly" every now and again, and that he has, once or twice, looked up to her window. However, he's vowed that he will never touch Abigail more: so his own guilt about his residual feelings for her as well as his resolve not to act on those feelings combine to produce the "violent undertone" he now uses to address Elizabeth when she expresses her doubt in him.
At the beginning of this conversation, Elizabeth wanted John to go tell the town that Abby had told him that "it had naught to do with witchcraft". However, John hesitates, and is ambiguous, saying non-committal phrases such as, "I'll think on it." This angers Elizabeth, because she feels that John "cannot keep it". She thinks it is crucial the town knows that the girls are frauds, and there her husband is, uttering things like, "Aye, 'tis a wonder they believe them," and "I'll think on it," instead of agreeing to go clear it up.
She-rather logically-decides that the reason he isn't exposing Abby is because he still cares about her. His response to her accusation reveals all of the frustration and tension that has existed between them for the past while: "Let you look to your own improvement before you judge your husband any more...you forget nothin' and forgive nothin'...Let you look sometimes for the goodness in me, and judge me not...your justice would freeze beer!" He is defensive, insecure about his sin, looking for kindness, and frustrated. She is insecure too, worried about Abby's place in his heart, and this conversation reveals that tension.