As a cache owner, you are responsible. Especially with urban caches, it's easy for a cache to be confused with something else. And, with all the possibilities of someone watching, someone finding the cache could be perceived as suspicious.

One of the most responsible things an urban hider could do is inform the local law enforcement about Geocaching. It could be to everyone's advantage to know where these caches are.

I've also come to the opinion that one of the most irresponsible things a cache finder can do is be stealthy. IMO it attracts more attention than just going after it, and explaining to anyone that catches you doing so what caching is. This is not an underground activity; it is not illegal. So why do we try and be so secrative? When a cache in is view of businesses and homes, you have no way of knowing who is watching, so there is always risk there.

You cannot blame anyone but the cache hider when things like this happen. I'm not saying that this or other caches were not placed with reasonable care and safety in mind. But it belongs to the cache owner, and you can be held accountable in these situations.

As far as caches being muggled, that is an unfortunate aspect of the game.

From the Geocaching.com Cache Listing Requirements / Guidelines

Guidelines that Apply to all Cache Types
For all physical caches and waypoints, think carefully about how your container and the actions of geocachers will be perceived by the public. For example, a cache hidden in full view of office or apartment building windows exposes a geocacher to being seen by someone who may think the cache search looks suspicious. Your cache may be hidden on public property, but there may be concerned residents on the other side of that property line. And, while an ammo box or PVC pipe may be a great container if hidden deep in the woods, it may cause alarm if discovered in an urban setting. A clear plastic container or a microcache may be a better choice. In busy areas, avoid containers that look suspicious, including attachment materials like wires or tape. To reduce confusion and alarm when a cache is discovered accidentally, clearly label your container on the outside with appropriate information to say it is a geocache. Cover over any military markings with paint or a geocache sticker. Include an explanatory "stash note" inside your cache. Common sense in selecting hiding spots and containers can reduce the risk of your cache being perceived as a danger to those who are unaware of our sport.