The Federation is getting walloped on all available fronts by numerous factions and subfactions. Starfleet can't afford to hang onto "ideals" if they want the interstellar nation they're protecting to survive to 2410.
For the record, those same "ideals" were repeatedly demonstrated to be downright foolhardy in Bashir's heyday as well, he's just too naive to pick up on it.
And that was the WORST failing of the writers of this game, sure there will be wars or fighting there always is. But lets take into account the writers have actually went out of their way to not only dredge up old races that said they were leaving, but made others evil who were not.
Plotdevice 8472 said they wanted nothing more to do with regular space and returned home.
Picard pretty well set it in motion that the Iconians were not really evil, especially not as evil as this fail story line makes them.
The fact that the house of Duras was not ran into the ground in this universe like others is actually pretty sad.
The mirror universe empire was GONE and enslaved a very short time ago, where in hell did all these new ships come from?
Why did every single species have to be set in at war at once? It was such a waste, the longevity of the game would have been far better served to string them along at a much more intelligent pace.
The Borg return especially should not have happened until at least season 3, the KDF war could have wrapped up with season 2 and then the quadrant kind of went back to a quasi state of piece only to have the Borg fly out of transwarp conduits by the thousands and ripped the whole local area to shreds and everyone has to fight back together, much more logical and dramatic storyline.