Well, under the American/English view of mental incapacity, commonly known as the M'Naghten Rule from some hoary old English case, diminished capacity is only a defense to a crime if it is shown to have destroyed the defendant's ability to differentiate right from wrong. So, basically only the floridly schizophrenic or profoundly mentally disabled can defend that way.
So, legally, the judge is correct and Hunter's addictions have no bearing on whether he did or did not evade taxes. Diminished capacity can come into play in sentencing, however.
On the other hand, the government is probably entitled to show his spending patterns to show why he wasn't paying his taxes and that he was knowing or intentional about it.
I really think we ought to develop some better jurisprudence on people with diminished capacity due to addiction and other disorders. It may well be that it should stay in the sentencing rather than the guilt phase.
I suspect that Joe understands that Hunter needs to suffer the consequences of his actions. That's the only way he'll get or stay sober.
I really rather doubt he'll be pardoned unless he receives a really draconian sentence. But he won't because white guy.