No, his thought is quite serious. The Catholic Church does NOT teach that capital punishment is sinful, only that it must be used in no instance that is not "extreme". The "rare case" attitude to capital punishment is not a magisterial teaching of the Church, only the strong recommendation of the current pope, and as such should not be taken lightly. But on this issue, unlike, say, abortion, there is room for dissent. Scalia is perfectly within his rights as an observant Catholic. The business about the Church being "captured" by Freud and his ilk is, I am sure, what annoyed Dulles. That's pretty harsh, although the modernist influence is widespread in some circles of the Church, particularly in the U.S.
I can sympathize with Scalia's frustration.