A retaliatory strike would be a defensible position one that Janeway and Picard would have understood. But they took it a step further, and made no attempt to distinguish friend from foe. Or even tell the Borg to stay away or Voyager to not get involved.
It seems you're thinking based on the foreknowledge of how the events unfold.
A few points:
1. Undine Behaviour:
- The Undine aren't humanoids.
- The first humanoid race they encounter is the Borg.
- They are the only sentient species in (their part of) fluidic space; so they haven't even encountered any
other species prior to the Borg invasion.
- Voyager's actions at that point could be easily interpreted as hostile.
- The Undine that wounds Harry Kim does so in a split second in a dark environment and surrounded by other humanoids; the virus is seemingly part of the Undine's biology, not a deliberate malicious act.
2. Picard's modus operandi:
- Picard wouldn't let his emotion (anger over the Kim incident) clould his judgment of a whole species; especially not with the potential misunderstandings outlined in 1.
- Picard doesn't hold other powers to the standards of the Federation; he's always willing to extend a hand to a former enemy or a less utopian power, to make a leap of faith: we're not saying the Undine are nice guys here, we're just saying that, by the time Janeway decides to ally with the Borg, she has precious little to judge the Undine by.
3. Even if one dismisses potential misunderstandings, the Undines' crime of "not making an effort to distinguish friend from foe" pales in comparison to the Borg's cime of "assimilating or destroying all in their path
"; something evidenced with more than a single telepath's vague recollections.
So, even then, they still look like the lesser evil.
The only way the Undine appear to be the greater evil is if:
- You take their desire to "purge the galaxy of genetic impurity" to be genuine (which the series denies later on).
- You judge the allegories they represent rather than their actions: one could see the Undine as nazis (purging impure genes...) and the Borg as the USSR/Maoist China (forced assimilation into a system that enforces equality through stripping individuality); at which point most western audiences would judge the latter a lesser evil.
In fact, this thread mostly outlines that the writers didn't really question the realism (in terms of character behaviour: Janeway's decision is just insane) of their cool premise and ran with it from exposition till happy end.