No, I didn't miss Phlox's point. I just find it appalling. He doesn't like what they're doing so he's going to let them all die. He was planning on helping them before he found out about the Menk. So that's interfering as well and "giving the advantage" to the Menk.
So given the choices of helping the Valakians and preserving the status quo, or doing nothing, solely to benefit the Menk, and letting the Valakians die, you're right... I'll choose the former. Tom Paris put it succinctly one PD episode... "They're all going to die, anything's got to be better than that." And saying that they didn't leave them to die is a cop-out. They're a non-warp capable race, so they aren't running into other races with any regularity to put it mildly unless they just happen to wonder into the system. That's just a cheap justification to avoid taking responsibility.
Yes, as I said the Menk do deserve better. The Valakians and the Menk both have rights to that world and will have to learn how to share it together. Given time, their social system can reform towards giving the Menk freedom, especially once they realize they're not alone in the universe. Extinction and slavery are both terrible things. Extinction can't be undone, but slavery can. But too bad they won't get the chance as they slowly die off.