They would be jumping into a moral quagmire for no real purpose.
Picard could certainly see a purpose. "Starfleet was founded to seek out new life. Well, there it sits!" Creating a new sentient and sapient species would be a great experiment and a fascinating start for an all-new type of exploration: one where wondrous things aren't brought in from the stars, but created on the spot.
Data himself later saw a purpose in multiplication, too. The slavery thing was always but a straw man and certainly had nothing to do with Maddox' motivations for studying Data - yet OTOH probably would have been no problem for the Federation morally, considering their use of comparably sentient AIs with holographic rather than android bodies later on.