Unless one has certainty that it was to be a total failure, action over inaction is preferable. It was his plan, afterall, and it should have worked; correct?
It would've worked if several things hadn't happened.
1. The beacon was lit late because the Tower of Ishal was taken.
2. Cailan was an idiot and fired only a single volley of arrows before leading a heroic (and pretty cool looking) charge outside of his defensive line and thus got himself and his men surrounded on all sides in the name of glory.
3. The darkspawn horde was STILL coming out of the wilds in that brief overhead view after we light the beacon, so the horde was not committed.
The plan was to lure the darkspawn into a bottleneck chokepoint, get them committed, and have Loghain come in from the flank them in a hammer/anvil, Cailan's forces (that Loghain most adamantly did not want him part of,) were to hold the line and when the whole horde was committed, Loghain would come in and strike hard. Thing is, the plan fell apart before Cailan's forces even clashed because Cailan led a charge out of the line and into the open, so Loghain's plan wouldn't have worked there because it was no longer being acted on.
I know that if I was the general leading the army there, and saw what was going on, I would also think a strategic retreat would be preferable in that situation, as far as I could see, the battle couldn't be won under those circumstances. Even if I led the charge, or in this case, Loghain, the odds were that Cailan and Duncan would still be dead before Loghain and his army could get close enough to help those two.