I think what should have happened was that Data admit that he was going to use the weapon, but was thankful that he was stopped by the transporter since this means Fojo can be brought to justice without having to kill him.
I also think they could have just had Data vaporize him. I mean, Riker killed the assassin in that one episode and moved on, why can't Data?
I kind of just find the ending of this episode disturbing. A horrendous death to the person helping Data. In this case I do agree a female character has been sacrificed to further Data's story. I didn't really need that for a valid reason to shoot the kidnapper.