I was thinking about this on the way home from work, so I would like to elaborate a little.
My feelings are that wealth is based on the value of the things you possess relative to the value of the things others possess. Wealth is a relative thing. The value of all those possessions is subjective. The market takes all of these subjective values and creates objective prices. So in order to determine if wealth was created or destroyed we would have to have a functioning market with prices. With these market prices you can determine the value of what was taken vrs. the value of what the thief did with it. To be clear this would only work with those things that have a market value. If the thief took Grandpa’s old squirrel rifle that you would never sell, then there would be no way to tell.
In your example there is no market. There are no prices. So we have no way of knowing if burning down A’s house actually created wealth. If there were prices we could possibly tell.
If I A would have sold his house for $100k to C. And C would have bought A’s house for $100k. We can say that when his house was burned A was deprived of $100K.
If after his house was burned A could only get $50K for the empty lot that his house once stood on, then we could confidently say that $50k of wealth was destroyed.
If after his house was burned A could get $150K for the empty lot that his house once stood on, then we could confidently say that $50K of wealth was created.
If after his house was burned A would never sell the lot or no one would ever buy the lot. Then we have no way of knowing. With out those prices it becomes impossible to compare the subjective valuations that individuals assign to objects..