You're definitely right in recognizing that these are two very similar answer choices, but there are differences between the two that make (C) the better choice. For (A) to be true, the people who criticize etiquette would have to believe both that it has beneficial effects and no beneficial effects for society. While people realize that kindness and social harmony is good, the information we're given in the passage doesn't allow us to equate these concepts with etiquette. Thus, "kindness and social harmony" and "etiquette" are two different things, and so believing that one is good and that one has no beneficial effects isn't contradictory.
(C), on the other hand, is supported because the stimulus tells us that etiquette prevents offense, which we can connect to the idea of social harmony - less offense means more social harmony. More social harmony is good, and so people who think that etiquette has no beneficial effects might be wrong because it helps promote social harmony. Hope this helps!