While I find your observation that “that the crime rate would go down if every single household were given a handgun” to be correct, I think you miss an important security aspect of the right to own a firearm when you posit:
Imagine how terrified potential robbers would be if they knew, without a shadow of a doubt, that they were entering a gun-owning home. If that’s not a deterrent, I don’t know what is.
In fact, criminals do not need to know that every household is armed, but only that some could be, without their knowing which. In that situation, breaking and entering then becomes a game of Russian roulette for criminals — and that would certainly raise their blood pressure.