Wasn't it the end of the TNG movie "Insurrection" where they beamed the bad guys onto a holodeck and made them think they were still on a ship? That movie also had the plan to relocate people via a holodeck.Edit: I just remembered another crafty use of a holodeck. Granted, the premise for the episode is lame, but when they used the holodeck to relocated that primitive colony in the Homeward episode
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The only reason he isn't said to have removed the holo rec room from the ship after the "The Practical Joker" (for all I know, he later did) is because it wasn't new and being tested, unlike the M-5 computer.