I'm glad genocide is such an easy decision for so many people. Gives me hope for the future.
This "moral dilemma" as such in "I, Borg" only makes sense in a context of the Borg not being an existential threat to the Federation. But that's not how they were depicted. They
were depicted as an existential threat to the Federation of an order beyond any encountered before, one both hellbent and capable of assimilating everyone in the Federation.
The Federation's survival against the Borg hung by a thread. It depended on one hero ship always being there to pull its ass out of the fire. With stakes and odds like that, after "I, Borg," there is absolutely no reason why Starfleet shouldn't remove Picard from command on suspicion that he's still in league with the Borg.
Remember what happened in the film
First Contact? If the Ent-E hadn't somehow gone along with the Borg Queen when she went back in time, there would have been no more Earth, you know, of the free variety, and no more Federation. The argument that, well, no one could foresee at the time of "I, Borg" how close the Federation really was to getting defeated, that argument doesn't hold water. The only reason that the Federation hadn't already been defeated by just a single Borg cube was because one hero ship had found that the Borg OS was behind on its software security patches. The odds against the Federation were already known at that point.
DS9 at least dealt with a similar premise more believably, vis-a-vis the Founders, Section 31, and the morphogenic virus. Peace was possible in the end, but only because the Founders
actually backed down from trying to enslave the Federation.