Short answers, pulled from the story.
Moral blindness, also known as ethical blindness, is a person's temporary inability to see the ethical aspect of a decision they are making. It is often caused by external factors that keep someone from recognizing the immoral aspect of their own behavior in that situation.
Moral blindness became a widely studied idea after World War II, particularly after the Holocaust, when psychologists began researching obedience and authority bias. Stanley Milgram and Philip Zimbardo were among the researchers who produced notable findings on human behavior in this area.
Adolf Eichmann was a German-Austrian Nazi soldier responsible for the deportation of Jews to extermination camps during the Holocaust, and his 1961 trial renewed interest in moral blindness. Hannah Arendt covered the trial for The New Yorker and coined the phrase "banality of evil" after Eichmann showed no remorse and claimed to have simply followed orders.
In his 1961-62 obedience studies, Milgram had subjects believe they were administering electric shocks to another participant who was actually a confederate. Sixty-five percent of subjects in the original study pulled a switch delivering what they believed was the maximum shock of 450 volts.
Research on moral blindness has been applied to management and organizational behavior, including corporate transgressions, business ethics, and moral disengagement at work. It has also been applied to law and justice, particularly concerns about moral blindness among lawyers, and to related ideas such as moral blind spots, ethical erosion, and ethical fading.
Psychologists believe moral blindness happens because situational or other external factors can cause a temporary, unconscious deviation from a person's intrinsic moral beliefs. Bandura argued this moral disengagement can stem from individual, situational, or institutional forces, including mechanisms like diffusion of responsibility.