I don't see why the Federation would look cowardly in this instance. As I said, it was the colonists' own idea to live under Cardassian rule. I'm just hazarding a guess that this is common knowledge in Trek's time. So since everyone knows that the colonies in question are Cardassian territory, AND that the Prime Directive forbids the Federation from interfering in colonies that aren't its own, the Federation cannot be blamed for any of this.
And as for the question of the treaty itself? Needs of the many, remember. The treaty with Cardassia affected everyone in the Federation, since without that treaty, there would be war. Politics of any kind will always involve compromises, and this surely is one. And since the colonists always had the option to MOVE, the reason why the Federation should have sat around wringing its hands because of a few hundred people gets smaller and smaller all the time.
To put it another way: Let's say that my city government does want to claim eminent domain and take my house. Let us also say that they have a brand spanking new house all ready for me to move into. You think I'm going to dig my head in the sand and say "But I don't want to abandon my home! Waaah! Waaah!"? Hell no! I'll leave skid marks on the way out of my front door. That is the analogy here: not only will the Federation help those colonists move, it'll already have new homes ready for them. That's the way the Federation works. Living space is infinite, and new homes can be constructed in an instant. (IRL, the government wouldn't exactly build me a new home, but they would have to pay me enough money to have it done.)
And as for the question of the treaty itself? Needs of the many, remember. The treaty with Cardassia affected everyone in the Federation, since without that treaty, there would be war. Politics of any kind will always involve compromises, and this surely is one. And since the colonists always had the option to MOVE, the reason why the Federation should have sat around wringing its hands because of a few hundred people gets smaller and smaller all the time.
To put it another way: Let's say that my city government does want to claim eminent domain and take my house. Let us also say that they have a brand spanking new house all ready for me to move into. You think I'm going to dig my head in the sand and say "But I don't want to abandon my home! Waaah! Waaah!"? Hell no! I'll leave skid marks on the way out of my front door. That is the analogy here: not only will the Federation help those colonists move, it'll already have new homes ready for them. That's the way the Federation works. Living space is infinite, and new homes can be constructed in an instant. (IRL, the government wouldn't exactly build me a new home, but they would have to pay me enough money to have it done.)