They are playing laterally, but it is not effective width because they are not holding the inside defenders. That means their talented outsides are getting the ball in channels that are still congested.
Juan Martin Hernandez, great player that he was, is a makeshift No 12 and his tendency to play lateral is a big part of Argentina's problem. How many times does he just hit a line, or angle and engage, or take on the inside defence?
If, as in the lower diagram, he straightens along with some others, it will hold the defence, creating space on the outside, something the All Blacks do exceptionally well. It would also give Sanchez more freedom to attack the line himself.
So for all their ambition to attack wide, it is too easy to defend. Yes, they will make some ground, but not line breaks that lead to points.
How do they fix it? Hernandez needs to straighten up and change his attitude, or they move Bosch into 12 and switch them depending on what moves they intend to run.
For Argentina to improve and be a genuine threat to the top teams, they must fix this lateral issue and become an attacking force.