Picard admitted that the reason he did not board the Cardy transport was that it would've resulted in war. And he thought the current peace was in the interests of both them and the Federation.
It was also no small coincidence that it was his orders, that whatever the cost, he was to preserve the peace
The fact that Maxwell was right is what makes it such a good story, because it's apparent that he alone was perhaps the one captain in the entire fleet who, when placed in that situation, would let the singular chink in his armor, of having had his family massacred, put him over the edge into what might otherwise be an unthinkable development, a rogue Starfleet captain
Had any other captain found out about this, it might not have come to what it did. It just so happened that the guy who found out was the one guy who couldn't let it rest in the purview of the diplomats, hence why he calls Picard a beurocrat
I doubt history would look upon Picard as a fool, & as events unfolded, I doubt Maxwell would have continued to be criminalized, in light of the future actions of the Cardassian military. One thing is certain though. Picard himself paid personally for the absense of action taken against them, for had Starfleet's guard been properly up, I can't imagine them being gullible enough to fall for the metagenic weapon ruse, that directly resulted in Picard's torture, at least not fall for it badly enough that they'd only send a 3 member recon team, which they only did in order to keep the operation covert & secret, & might not have been how they would've operated, had they taken the hostile intent that Maxwell uncovered more seriously