This is an expression made popular by Shakespeare. In movies, we sometimes find the hero taking the law into his own hands when the legal system fails him. The villain kills his family members, but the police and the court fail to put the man behind bars. The hero then decides to take matters into his own hands, and goes around killing all those close to the villain. By doing this, he is committing a wrong, but he feels that he has the right to do what he is doing because a greater wrong has been done to him. He feels that he is the victim. When you say that someone is more sinned against than sinning, what you mean is that the individual is less guilty than those who have wronged him.
Example: It’s true she shot the politician in cold blood. But when you hear the entire story, you’ll feel she was more sinned against than sinning.
Source: “The Hindu” – Know Your English Column – Feb 19, 2008