This has been discussed MANY times, and yes they basically let a species die because of racist pseudoscientific reasons.
Trek writes don't understand evolution.
Another example of the monstrousness of the PD as well even though this was technically before the PD.
A true Star Trek low.
I've never re-watched this episode and don't plan to either.
I suppose we should happy there wasn't a scene where Phlox and Archer spend a video of themselves mixing the cure with champaign and then drinking it, to the Valakians.
I do think this topic is serious enough to merit a lot of discussion. Phlox and Archer come off as rather callous and psychopathic in this episode. The logic they use to justify not giving the cure to the Valakians seems similar to the ideas you would find in Nazi Germany: "One race is holding another race back and that race needs to be destroyed for the other race to thrive." This may be one of the most villainous things a Star Fleet captain has done and he was supposed to be the hero.
What were they thinking with this script?