Hollis mason was an honest cop and he figured the mask's were doing more law enforcement than the boys in blue.
In context, that doesn't make any sense. Every other mask was shown to be a weirdo of some kind. Hollis was a normal guy with few hangups. In that world, just like this one, normal people simply don't run around in costumes.
And pointing out how effective the masks were (right or wrong) doesn't work. Hollis only had one predecessor, Hooded Justice, to use as a model. How could he tell whether it would be effective?
Anyway, if Hollis really thought vigilantism was effective, he could have just put on a ski mask and carried a baseball bat. The comic story doesn't give him any reason to do more than that.
One could argue that the reason why the "masks" didn't just run around in ski masks was for public image - a shadowy man in the alley in a ski mask seems like a criminal. And in point of fact, the closest "hero" to that, Rorschach, was the one most perceived as a nutcase and vigilante long before popular opinion turned against the costumed adventurers.
But then, all this may just be overthinking it. The reason why Mason dressed up in a costume is because Watchmen is about super heroes in the 20th century American comic book stylization of the idea; not just vigilantism.
It is why my view on it remains that Moore wasn't writing about how all super heroes would have to be insane to exist in the real world - odd, perhaps, unusual, yes, but no more odd or unusual than anyone who deviates from the baseline norm in public behavior. Rather, he was writing about the idea of the super hero
versus the real world and what would be the consequences of that idealistic scheme when it crashed into reality - both for good and bad.
The real tip-off is the scene where The Comedian burns the young Ozymandias' map in the flashback adventurer meeting. Comedian, perhaps with intentional hypocrisy, derides the other "heroes" as silly and foolish for dressing up in costumes and believing their acts of heroism really did anything to change the world's fundamental nature. Which was, in Comedian's view, inherently destructive and twisted. In this scene, the other adventurers are not crazy, maladjusted, or even oblivious to the oddity of their passtime - they're just overly idealistic.
I think Synder got what the story was about. His take on Dan and Laurie does not scrub the characters of all their "oddness". For chrissake, Dan has a sexual costume fetish and Laurie labors under an identity crisis having grown up as the daughter of an adventurer perceived in idealized terms thanks to historical nostalgia and ignorance of her parentage. By the same token though, they're not delusional and aren't really busted people. They do the costumed adventurer thing because there's a historical precedent for it in their world, realistic as that world is - Watchmen may be about heroism and idealism versus the real world's complications, but it isn't entirely our world. It's an alternate history.
Now, Kick Ass, is your entirely literal examination of what would happen if people put on costumes and tried to be super heroes in our world - there, you only have two choices, extreme naivete that is quickly pounded flat, and genuine, deep dysfunction.