Yeah, I'm sure the operators of the Great Firewall could identify sources of hacks and DDoS after the fact, but it's just not within the scope of their responsibilities. They're just there to enforce government policies that most of them don't even agree with, it's just a day job. They're not going to go out of their way to make China friendlier to the rest of the Internet.
I'd say the Great Firewall does more now that it used to. A decade ago, there wasn't really a Great Firewall as such, and ISPs were responsible for blocking what the government told them to, so you got different behaviour on different ISPs. Some ISPs would redirect you to a "this is blocked" page, others would give "connection reset by peer", while still others would black-hole traffic. At least now the government deploys the filtering and sets the policies now, so you get consistent behaviour across ISPs.
Yeah, some hacking comes from China. Some of it is just botnets of pwned PCs that could be operated from anywhere. That part of it isn't any worse per capita than anywhere else in the world. The Chinese government probably has some offensive hacking capability, and I wouldn't want to be on the receiving end of it. It's probably used for very targeted attacks on high-value targets. But I don't think half the things blamed on China really come from China at all.