What does Arthur F. Holmes mean by this, The equation of sin and crime may well make sense for a confessedly theocratic society where an overwhelming moral consensus exists?
This answer can be found in Chapter 11 of Ethics: Approaching Moral Decisions. Holmes is saying that equating sin and crime raises concerns in pluralistic societies, like the modern United States. The problem is, in Holmes's words: "If morality is to be legally enforced, whose morality shall it be?" Holmes raises this question to begin a chapter on where a Christian morality fits into a broader spectrum of moralists, including paternalists, legal moralists, and libertarian moralists. Holmes argues that even in a pluralistic society, it is possible to have laws based on a Christian ethic, i.e. laws aimed at creating (or imposing, it can be argued) "a moral good intended by God for human society." But he also acknowledges that these laws must have limits. They should be limited to those behaviors that a broad cultural consensus holds are harmful to society, and they should be a "last resort." Christian moralists can seek to spread their morality through moral suasion, boycotts, and teaching rather than negatively imposing it by the force of law.