I think in this case that how one interprets what one sees hinges on whether one believes that the M5 really killed everyone aboard the Excalibur.
If you believe that, then you have to believe that there is some way to fire ship phasers against a damaged and unshielded starship to accomplish that. If not wide area kill, then maybe it hit a reactor which sent a lethal pulse of radiation when it blew, but which didn't destroy the ship.
On the other hand, if you don't believe that it killed everyone, then of course, you don't have to believe that phasers could accomplish that.
As I've already said, I see no reason to doubt that the M5 killed everyone aboard the Excalibur.
Kirk said so, and the M5 believed it. If Kirk knew it was not so, then I don't see why he would have posited it to the M5 in the first place, since he was trying to out-think it. Positing information you know or suspect to be false is not a very good way to try to out-think a computer that can think faster than any human being.