No, Picard was not wrong. What he did was very much in keeping with everything we have come to know about Federation moral principles. The Federation follows an absolute code of morality that is black and white about what it sees as wrong and right. It would never sanction the murder of one innocent life to save even a hundred billion people. We may view his decision as silly from a practical point of view, but that is not how the Federation judges actions. It is Nechayev's comments that would be considered bizarre within the Federation.