The Warden, at the moment of making the decision, knows next to nothing about Old Gods, souls or for that matter the works of H.P. Lovecraft. What s/he knows is that the Archdemon needs to die. Realistically, three Wardens fighting their way through Denerim and killing the Archdemon would be a miracle. Taking the possibility of failure into account is an equally integral part of being a commander, which the Warden also isn't yet. Everybody else being able to kill the Archdemon would mean a huge increase in likelihood of it actually happening, and a baby "born with the soul of an Old God" sounds, on the face of it, like a far more manageable threat than the Blight continuing to rage on.
You preserve an old god soul and since these souls emit the calling you don't know if as a result of it the darkspawn in Denerim will retreat or no,with the huge risk to be unsure if that process is really able to trick the darkspawns both by hiding the calling of the old god from them
(thus end the blight) and into being attracted to a child rather than a darkspawn.
The Ultimate sacrifice is not a tactical blunder in any event because is a military certainty who was tested several times.
From Gaiders own words the wardens are the only one who possess among the military the raw power to defeat the Archdemon without being turned into ghouls,so unless you forgot that non-GW are vulnerable to the taint and that the one of the Archdemon is highly infective and can be emitted through his magical vortex i don't see how the weak Ferelden military could defeat him while he his protected by Darkspawns
Potential ghouls i will dare to say that may turn against you and serve the Archdemon.
There you have more Archdemon killers that are unable to do anything until the Archdemon is defeated by the wardens.
Aren, I still don't like the choice.. I understand when you still don't like it. But this is kind of advantage that would make me a sellout. lol. My price wouldn't be "Hey you can save yourself". It'd have be on this scale. And then I might be interested enough to see the results or pay the price later, if need be.
Still contrary because you have to assume that once that the ritual is done the blight will end while perfectly aware that old god soul emit the calling that may keep those darkspawns in the battlefield.