Much has been made of Sulu's pronouncement that "the Excalibur looks dead" and M-5's readout that the ship contained "no life", but Commodore Wesley never said any starship had been destoryed or that any entire ship's crew had been lost. While it was clear that all four of Wesley's ships sustained major damage and significant casualties, Wesley never said (1: that any ship had been actually destroyed or rendered completely worthless, or (2: that "the crew of starship X has been lost." It could be that Wesley evacuated the survivors from the damaged Excalibur, or that survivors were trapped inside the disabled ship.
I really think we're meant to take away that M5 killed everyone on the Excalibur, even though Wesley only mentioned the captain and first officer. While he never said the whole crew was lost, neither did anyone mention the survivors were rescued. M5 would have been aware of a rescue effort (damned thing knew everything else going on).
All we know is Sulu said the ship looked dead and M5 said there was no life aboard. Kirk then said because M5 murdered them. Without any statement to the contrary, I have to go with "M5 killed everyone on board."