It's not out of character, but it's out of the norm. Let's all remember that Picard was traditionally a diplomat and academic first, fighter second, hence why the action-oriented character of Riker had to be created. For every episode where Picard had to get his hands dirty, Riker probably had 5 or more. I never said Picard wouldn't fight, but whenever he did on TNG, it was rare. That's what makes his fights special.
Exactly what a Trek movie needs. Special stuff. What I like about all the TNG movies is that they put the characters in special situations. They would have never killed off Picard's family in a regular episode, or gave Data an emotions chip or destroyed the Enterprise for good.