Suppose that I'm aware that future villains are punished in their pasts by wallet theft. I now wish to decide whether to commit a big crime; and I consider whether my wallet has often been stolen.

If it has, then I've already suffered the punishment, and have nothing to lose anymore - so I commit the crime.

If it hasn't, then I conclude committing the crime would lead to a time-traveling paradox, and don't commit it.

So the less you pre-punish people, the less you encourage them to be villains.