This is one of the novel's clearest statements that the dream-ideal is a form of illusion that removes one from sanity. On the surface it seems that the narrator recommends love over justice as the proper priority. But what is referred to here is "an idea of justice," specifically in the mind of an "insane" man. What is really recommended is the priority of love over idealism.

The question is whether this insight is the narrator's, or Mrs Gould's. Though it sounds like a narrative elaboration, note that Mrs Gould's tears start immediately after it. In either case, she clearly recognizes her husband's "fit" for what it is, and starts crying because of its implications.