It's common in sf to limit telepathy: touch, line of sight, proximity... very few can sense off planet, which makes sense, because as Douglas Adams points out, they'd be deafened otherwise.Limit a telepathic range, that would work, she can read minds as long as persons was in the same room as her or within 2 metres or something.
Picard might be less preachy as a 23rd century captain, and the PD would not mean let civilisations die