What about the massive well armed Viddian fleet of privateers harvesting organs?
If the Vidiians deconstruct that, all the races that they raped, are going to descend on Vidiia, sack that planet and salt the earth.
Meanwhile why would the privateers give up the good life (as gods that arrive on low tech worlds and industrialize organ harvesting to the point of billions of cow like sentient beings standing in queues waiting orderly to be carved up in process lines.) just to join breadlines on Vidiia when they could knock over weak planets and set themselves up as kings?
Hell just because they can't sell organs any more, they're still selling all the starships they "acquire" but now in stead of hanging the crew in meatlockers on hooks they're just flushed into space as superfluous. You would think that they have always made more money from selling Starships than kidneys?
You don't lose your ship automatically. There's a board of inquiry where you have the opportunity to defend yourself, which could then turn into a court-martial where you really have to defend yourself. It was a possibility that he could have lost his ship over that decision, not a certainty.
The Federation Council and your average Federation Citizen isn't bound to the Prime Directive. It's a Starfleet Rule, not a Federation Law. Once the Federation Council opens diplomatic relations with a World/Empire it changes the rules with how Starfleet is allowed to interact with that World/Empire and to what degree the Prime Directive impacts on their relationship.
Besides Picard made it clear that the prime directive is a serious guideline with how they meet new species after the DISASTROUS first contact with the Klingons that kicked off 200 years of war which ran hot and cold... And then 10 years later Berman made broken Bow.
It's not a new Hitler they're worried about more so than a new Klingon Empire.