I think Picard should have gone ahead with the plan to destroy the Collective.
It wasn't just the Federation at stake, but the entire galaxy. I think making Picard very ethical was interesting writing, but I think Picard's moral nature got in the way here.
Another thing is that the whole reasoning why it was a wrong idea came from Beverly, and I think her characterisation was often weak, since she always used to judge things from Earth/human morality. She could never be objective in her analyses of situations.
No different then Dr. Bashir and his morality in some episodes. The Starfleet docs are simply trained a different way.
Was Picard right or wrong in his decision?
I think when they weighed all the options, allowing an individual mind to link to the collective sounded like a more "Human" solution, rather then committing mass genocide.
Sure it was a survival of the fittest where it's kinda a "Kill or be killed/assimilation" situation..... and don't forget that Picard was gunning for wiping them all out until he actually stopped looking at them as mindless automatons and actually talked to one to see that indeed, a person does still exist deep down inside.... they're victims.... prisoners if you will.
In the end, it seemed as though there was just as much of a chance for individuality to break apart the collective and remove the borg threat, then this virus idea which wouldn't have given anyone a chance at survival and individuality and thus wipe out billions of lives.
Would it have been right to commit genocide when alternative options were available?
If you were in the same position and had no knowledge of the out come where Lore would have taken over and almost created an even worse form of Borg.... it'd be difficult for any of us to come to the exact same conclusions.
In the end, I believe Picard made the right decision, though I could understand if the alternative was chosen.