Seems like wanting to start a war with the Klingons may have been a more rational choice, but we'd done that one already.
Then again, Edison's rationality was something to be questioned. As it is, I can't see how he even thought killing the residents of Yorktown would've ushered in period of violence and war. If anything, as is the case with some blatant acts of terrorism, it may have had the opposite effect, and in this case, drew the Federation members even closer together and even more committed to peace.
If he had killed everyone in Yorktown and taken over the station as a base of future operations, that would not have worked. He would've never had the chance to build it up. With only him and his cabal as residents, Starfleet simply would've put everything it had into destroying Yorktown. End of problem. He was another insane villain who just wanted to see things burn because it made him feel better. His plan held no water.