Or it could have simply lead to the defeat of the elven soldiers, and left the Dales vulnerable if the darkspawn turned their attention towards the elven kingdom. Or it could have been criticized as the wrong move by the elven people or the nobility who governed the Dales, who may have felt that action should have been taken to save lives. We don't have all the facts, and it's impossible to make any claims with any real certainty. Perhaps they thought the horde couldn't be penetrated; there are reasons why Loghain's refusal to hold back the army from engaging the darkspawn are debated to this day.
Of course, this is also a moot point, as the Dalish clans signed a treaty with the Grey Wardens after the fall and occupation of the Dales, despite having no incentive to do so. The Dalish clans apparently felt differently than the elven army who didn't intervene.
Then they could have withdrawn. The Emerald Knights rode Halla, right? If the Darkspawn get too close, bail, and keep shooting arrows at them. Loghain held back his army because the fight was clearly lost, and there was no way in hell his troops would have made any difference. The siege was clearly more evenly matched, and even if it seemed hopeless at first, the Elves sat there for the whole battle. At some point, they would have seen a moment where they could make a difference and turn the tides, and they didn't take it.
You're right, we don't have all the facts, and yeah, maybe the actions of that general were sharply criticized, but you have to admit, from what we do know, this sounds really terrible.
You know, I feel pretty comfortable criticizing the humans and elves leaving the darkspawn entirely to the dwarves to deal with, given how they know how dangerous the darkspawn can be.
Sure, I'd agree with that. They should be helping out the dwarves. But two wrongs don't make a right, and come on, if a bunch of Orlesian soldiers saw the Legion of the Dead fighting for their lives, they would stop and help. Hell, judging by some of Gaspard's comments in The Masked Empire, they might have been honorbound to assist them.