It doesn't matter if all the members of the conspiracy are still in the fleet or not.
It does matter if your intent is to establish whether or not a precedent has been set. As I said before, I do not think a precedent can reasonably be said to have been set when the institution supposedly setting that precedent literally doesn't know about it.
Picard and the others did what they thought was right. Who are they then to tell someone else that they're wrong if other Captains, Admirals and such decide to remove Bacco for what they believe to be good and valid reasons?
Who's to say that Picard would thwart such a hypothetical anti-Bacco conspiracy? It's more likely the Protection Detail would.
Interesting side-note: Articles of the Federation
established that Starfleet Security was responsible for protecting the President, but Destiny
and Cold Equations: Silent Weapons
established the existence of a new, civilian organization, the Protection Detail (a division of the Federation Security Agency), as being responsible for protecting the President after 2381. Since it would seem that Ross and company used their authority as admirals to empty the Palais of the Starfleet Security officers normally charged with protecting Zife, that's a positive indication that the scenario you're proposing is now considerably more difficult.
If it's OK for Picard to override the democratic wishes of the population of the Federation
That's one way of viewing it, and that's completely valid.
On the other hand, I'm fairly certain that the people of the Federation did not vote for Zife because they wanted him engaging in negligent homicide, mass murder, aggressive warfare, occupation, and obstruction of justice. And allowing such a monster to continue in office could reasonably be argued to be a travesty of liberal democracy, too.
As I said, I go both ways on this issue.
Who's to say the Federation has grown more lenient? There's numerous examples that the Federation is now willing, nay, expected, to allow entire civilizations to die because of the Prime Directive.
Penalties for violation of civil law are almost completely unrelated to foreign policy towards pre-contact societies. Movement in one area tells us little if anything about movement in another.
They've also known about section 31 since the time of Archer,
Wow. Wow, wow. Hold your horses there.
Who is "they?"
President Zife, in A Time to Heal
, had no idea what Section 31 was, and had no idea who they were when he encountered their agents.
We know that Section 31 has some allies high in Starfleet -- and, given Ross's attitudes towards them, some who are terrified of them and so don't oppose them.
Does this represent significant institutional corruption? Of course.
Is that the same thing as the Federation government, as a whole, knowing about Section 31? No. In fact, indications are that most key political leaders in the UFP have never heard of Section 31.
To make a comparison: Does the existence of Nixon's Plumbers
therefore indict the entire United States government?
ENT: The Good That Men Do
made rousing speeches (in the novels as well) about bringing them down and yet Section 31 continues pretty much without opposition.
established very clearly that Section 31 was exposed and disbanded, and its operatives brought to justice, by the early 25th Century.
A Time to Kill
Kirk wasn't above threatening to destroy Flint's planet or Eminiar VII.
explicitly established that the Federation Charter had been amended to ban the destruction of planets.
The Federation is not as nice and benevolent as people tend to ret-con it to be.
No, it is not. But it is also not as dark and insidious as you are making it sound.
The Federation is not utopia. It has significant instances of institutional corruption, and it sometimes violates people's rights. More than a few, of course, have accused it of being a homogenizing force, of seeking to impose its values on foreign cultures, and of being a force for cultural imperialism. They are not entirely wrong.
But the Federation is also not an utterly corrupt state. It is a polity that represents real and significant improvements in almost ever relevant area of modern politics. It is more politically stable and mature, more genuinely democratic, more egalitarian, more civil libertarian, more environmentally friendly, and more peaceful, on almost every level, than any society that exists in the real world. It's not the dark and dystopian society some people try to spin it to be.