Who have Jewish people replaced sacrifices with good deeds?

An early passage from a minor Talmudic tractate entitled Abot de Rabbi Nathan places in the mouth of Rabbi Yohanan ben Zakkai the following declaration:

"Be not grieved; we have another atonement as effective as this [=the Temple sacrificial ritual], and what is it? It is acts of loving kindness, as it is said: 'For I desire mercy and not sacrifice'" (Hos.6:6)."

Elsewhere the Talmud writes:

"Not to mourn at all is not feasible, for the decree has already beeen decreed. But further, to mourn excessively (also) is not feasible. Rather, thus the sages have said, 'A man shall plaster his home with plaster and leave over a small bit as a remembrance of Jerusalem'" (t. Sotah 15:12).

Here's the issue: they replaced the offering of sacrifices with good deeds. This, they purport, is acceptable before the eyes of God.

Or, is it?