But what is the context? With so many gamers patronizing about PCs being "special", having stats quite higher than average people, being heroes already at level 1, why should you not expect them to think they are actually SUPPOSED to go against something like a criminal guild? That's pretty much a heros' job! I don't think they deserve to be called stupid.
It's one thing to go against a dragon or another gigantic monster (size is the simplest indication of power ), but especially when the players are not expert in D&D lore, it's quite reasonable for them to think a human foe without magic powers would be a normal combat challenge. Especially a criminal since most times IRL a criminal 's powers lie in deception, social manipulation and networking skills rather than physical prowess. Mafia bosses are usually old guys who couldn't throw a punch.
Yes of course a human NPC could be 20th level, but how can the players tell if the DM doesn't provide clues or opportunity to gather some lore on such adversaries?