I agree with this.
Firstly, vaporizing multiple cities in order to avert a nuclear war is like killing five hostages to save the sixth.
well, he does say he's killing millions to save billions. It's more like killing one hostage to save a thousand others...
Retaliated? Against who? This part of the story, I liked. If it appears that Dr. Manhattan has, in response to nuclear escalation, started laying cities waste, then everyone is going to behave. From every human's point of view, Manhattan has started squashing them indiscriminately. I can hardly see Moscow ordering a nuclear strike. Against what? and risk complete annihilation? I think they're better off giving Manhattan what he wants. Or what they think he wants.I don't see why several cities were necessary to drive the point home when one would have sufficed--it seemed totally gratuitous on Veidt's part. New York is dead: do we need to see Moscow and a half dozen other metropoles laid waste to know that John Osterman is Pissed?
Secondly, in the book, the squid was of course a powerful WMD but one immediately obviously different in kind from a nuke. In the film, the Manhattan Power or whatever Veidt was using was really not. Add the multiple cities attacked, and there would have been a very good chance that the United States, Soviet Union, or both, particularly at the level of alert they were operating, would have retaliated immediately.
I think the movie could have made this point a little more strongly, since it's so central, but it more or less worked.