If nobody else (including the police) has guns criminals don't need them either.
Lets take a situation of a robbery though as thats one of the more common gun crimes. Everybody is obviously safest when nobody has a gun, but as you said criminals have access to guns illegally so lets look at the situation when the criminal has a gun. Is everybody safest when;
a) Everybody else is unarmed
b) Other people are armed
Situation a) is likely to end up with the criminal getting away with the robbery at least for the time being. Situation b) is likely to end up with someone being shot.
Edit: @MrStick. You are listing outliers against a trend. It doesn't make the trend false. Also there was a reason developed countries were used in the graph, it reduces the huge confounding variables found in countries such as Mexico where there is practically civil war between the cartels and the police.
