There are some words that are omitted, and assumed to be understood, as in: "Repeated surveys show that we fear crime far more than (the amount that) is justified." I confess that I don't know what the grammatical logic is to omitting those words (if there is any). Omissions like this are somewhat common. Your idea about "far more than it is justified" is another potential analysis, but I don't personally find it as satisfying because "it" might be mistaken to represent "crime" rather than the invisible-and-yet-implied noun "the amount that we fear crime".