I think this should be divided in two arguments. One, was Picard's choice the correct one for the time of its making? Two, was it the correct one in retrospect?
Back in "I, Borg", Picard did not yet know that the genocide plan had no realistic chance of working against the Borg, so this shortcoming should not affect the evaluation of his decisionmaking. He probably believed that the weapon would work - unless he had some inside information from being Locutus.
OTOH, back then, Picard did not know that the Borg might be a threat to the galaxy, either. As far as he knew, the Borg were only a local threat, one with a particular interest toward the UFP. He couldn't tell himself that he was doing some messianic deed for the good of quadrillions. Again unless his Locutus days had provided him with contrary data he wasn't sharing with the audience or, it seems, with Starfleet.
The blood of millions of Germans is on the hands of the allies, that does not mean fighting WW2 to a conclusion was wrong. The blood of thousands of Afghans and Iraqis is on the hands of those who launched those respective wars, again it does not inherently mean the decision was wrong.
Why not? A different set of murderous goons is in power (local or global) now than would have been if the wars had been cut short. Who cares? The amount of blood spilled still exists, still can be quantified, still can be solely blamed on those who pulled the triggers or dropped the bombs.
In general, more blood is shed by the victor than by the loser. That's how one wins wars, after all. OTOH, the victor defines good and evil for the following few decades. All the more reason, then, to ignore his pious definitions and stick to that which universally works: the amount of suffering directly generated. By that definition, all total victories are undesirable, because a limited victory causes less suffering. This would most certainly have been true of WWII, where Germany was explicitly prevented from surrendering until all of Europe had been lost to the horrors of the war.