I don't even think the decision was the worst part about the episode.
There are two far bigger problems.
1) I always imagined the PD as something they arrived at through mistakes. Like, maybe they found an empire savagely crushing another nation, and armed that other nation to protect them. Then when that nation won the war, they were even harsher and more sadistic than the empire. I don't see them arriving at the PD without making a mistake like that first, so I was hugely disappointed when they just pulled it out of thin air.
2) That's not even the main case the PD was meant to apply to. It was meant to apply to getting involved in wars, advancing other worlds' technology. The Pen Pals/Homeward case is a fringe case, and they made the PD all about that case.