As an aside, Tomalak is awesome and I liked the interaction between him and Picard. I can also see validity to the idea that Picard was being a bit unreasonable in this situation with regard to returning the prisoner.
It's cool to see both perspectives on the situation -- it's entirely possible that the Romulans were on Galorndon Core because they really did have a navigational error and Tomalak was really just trying to get his man back and here's Picard being a complete dick. Regardless though, and even if Picard bought the navigational error story, if the Flagship of the Federation spots a Romulan incursion in progress, the Captain probably has no choice but to not let it stand.
In this episode's semi-sequel, "The Defector", I really loved the smirk on Tomalak's face when he delivered the line "Captain Picard, I hardly expected to see you again so soon. It seems this time you are the one who has made an aggressive move across the Neutral Zone..."