The Dominion was the aggressor in all this, so the ultimate blame for the war falls on them.
The Dominion's attitude is unrealistic and basically crazy. They want to bring order to and conquer the entire galaxy.
Which means endless warfare, bullying people, and a chance that some power or someone is finally going to nail them good.
As far diplomatic screw ups, the Dominion made the first and biggest mistake, but at times the Fed's attitude was just as hard to understand.
They just discovered the wormhole a year or two ago, and already they're on the other side setting up colonies?
I'd be really uncomfortable about setting up a colony on the other side of the wormhole (which could collapse at any moment, who knows) 70 years away, especially after hearing stories about the Dominion.
For Starfleet to let the wormhole stay open as long as they did, with no dedicated fleet to guard the station, was just waiting for trouble IMO.