Absolutely what the parents did was wrong, however there is no way the parents new the police officer was a pedophile. But even if he wasn't, getting a buddy cop to get involved while keeping the issue quiet is wrong.
Absolutely, handling such cases on a case by case basis is important, but by enabling flexibility, we lose consistency and open the door to gender or racial discrimination (black boy who acts inappropriately with white girl gets the book thrown at him, while white girl who acts inappropriately with white boy gets community service and an expunged record). While I think case by case flexibility is good, it is important to draw lines.
If we are to determine cases in a case by case basis, how can we say what should have happened to this duggar? We do not know all of the facts, those facts have not been determined by a court. Certainly we all agree that something more should have happened, licensed professionals should have been (and likely should still be) involved, but more than that what can we say?