Yes, because their plan wouldn't have worked and may have made things WORSE if anything. Seriously, in all the millenia that the Borg have existed that couldn't be the first time someone thought of a virus to use on them.
The Borg haven't launched a REAL attack on the Federation because they KNOW it's not a real threat to them. If the Feds used Hugh as a carrier, the virus not only wouldn't have worked but it would've alerted the Borg to the Feds' plan. This may have made them up the Feds to a real threat, provoking a REAL invasion. An invasion they'd never survive.
So yes, Picard was in the right.