No, it's not a very flattering portrayal of the man. But it's human and it's believable. Even Jean-Luc Picard can't be heroic all the time. We all have lapses and failures. But Picard did come through at the end by retracting his misguided order. No, he didn't find the key to saving the day, but he did choose not to make it worse -- and, more importantly to his character arc here, he saved his soul.
While it's fine to say that Picard "saved his soul," we as readers aren't privy to that, as Picard's epiphany occurs off-stage. Geordi has his throwdown with Picard, then later Worf tells Geordi that the order was rescinded, but we're never shown the moment where the lightbulb goes off in Picard's head. Geordi starting Picard down that path to self-realization wasn't quite enough for me. I'd have liked to see Picard fix the fractured demons of his psyche on the page, rather than be told about it after the fact. Delve into his mind, reboot his personality if need be (I thought that's why we kept going to the Ressikan flute, with that lifetime of memories being used to "reboot" Picard's personality), and fix
Picard. As it's presented in Lost Souls
, to my thinking, Picard's emotional growth was arbitrary rather than "human and believable." *shrug*