I always figured (apart from Picard being dramatic) that it was because one non-Federation species erased another non-Federation species.
Yeah that was my take on it as well. Combined with the fact that Kevin was clearly dangerous as hell. You wouldn't want to risk him in inadvertently wiping out humanity
while you're putting him on trial.
Best to just quarantine the planet and get the hell away from there.
If he can't leave the planet, then Picard should have just said something about his punishment would be living alone forever with what he did. Picard as usual never takes a stand unless he has to.