Isaiah contrasts the general apostasy and sinfulness of the people with the purity of the Atoning Messiah who removes our sins. The phrase “the Lord hath laid on him the iniquities of us all” is very clearly a reference to the atonement. The reference to Israel as sheep turning away establishes a contrast with the “lamb” of verse 7. Implicitly, Jesus is the shepherd and his sheep have turned away from him. This concept reprises the shaming of the suffering servant by the community.
Variation: The Book of Mormon text has “iniquities,” while the KJV text has “iniquity.” While this plural/singular variation may simply be a dictation error (see discussion accompanying Mosiah 13:13), Tvedtnes notes that the Hebrew term may be used as a collective. In other words, while grammatically singular, it may be legitimately translated as a plural in languages where the translated word is not a collective.