This incident poses extremely important questions, one which has been asked multiple times. Why do bad things happen to good people? Why doesn’t a merciful God prevent terrible atrocities? Amulek asks if they cannot “stretch forth our hands, and exercise the power of God which is in us, and save them from the flames?” He doesn’t ask whether it was possible, but rather, why they do not do what Amulek believes sincerely they could do.
Alma’s answer is not really satisfying for a modern reader. Nevertheless, it contains the elements of the answer to all such questions. The first and unstated reason is the imperative of agency. The Lord can, and does, interfere in some actions of humankind, but not in all. Mortals cannot know His reasons for when He chooses to intervene, but it is certain that agency is the overriding principle.
The second part of the answer is that earthly injustices are temporal, and not eternal. While human injustice may often result in the death of innocents, in the eternal perspective, “the Lord receiveth them up unto himself, in glory.” Those who perpetrate such actions also receive the eternal justice for their actions. Alma tells Amulek that from God’s perspective, all will be made just, even when our current perspective sees things as terribly unjust.