This is an argument that will live in infamy in the Trek universe. In this case, there is no question in my mind that Picard made the right decision under the circumstances. Let me say that again. Under the circumstances.
The threat to Earth, for the time being, had been averted. Borg activity was negligible; a Cube wasn't lurking around every nebula. At this point, Picard was faced with a decision. But there are many variables to the decision that are not easily noticed because of the nature of the story.
For one thing, there is no direct evidence to suggest that the paradox virus would have resulted in the destruction of the Borg. Sure, Data and Geordi put on a good presentation when they unveil it to Picard, but really, they expect us to believe that after only a few encounters with the Borg they've managed to circumvent every anti-virus technology they posess? For all we know, all this virus would have done is make the the Borg that much more interested in assimilating us, since we came up with such an inventive form of resistance. A fleet of Cubes assimilate Earth, and we all trash Picard for ever considering using the virus. I'm not saying it would have happened this way, but considering what we know of the Borg now and especially the insatiable nature of the Queen, you have to admit it's a possibility.
As to those that posed the hypothetical scenario of "If the Borg were in our solar system and the virus was our only chance to stop them", I would say yes, absolutely. Under those circumstances, we have nothing to lose. But you have to remember, those are different variables than what was going on in I, Borg.
Also, consider Nachayev's position. She's as much a politician as she is a Starfleet officer, that much is clear. When she tore into Picard in Decent, she was more than likely taking out the stress she felt from her superiors on Earth who just wanted the whole Borg threat to quietly die. If the Hugh incident had occurred prior to Wolf 359, I would not be surprised in the least if she had a very different attitude about Picard's decision.