The Klingons also have cloaking devices which would always give them an edge.
But how long would the Klingons exclusively have a cloaking device? Starfleet wasn't without a cloaking device because they couldn't produce one, it was because they agreed by treaty not to produce one.And they had the cloak, which at the time, made them seem scary.
A war that could kill billions trumps any treaty
Picard certainly had the motivation to do so. And the episode contained no verification of Picard's statement, Riker said that the Klingons had recently suffered a major defeat at the hands of Starfleet. The crew seemed in good morale. Starfleet had suffer ship loses over the course of a two decade long war, but was still capable of building Galaxy class "battleships."Yet, there's no proof he did lie to her.
