It was a tough call for me. On the one hand, the only reason the mayor was forced to make that hard call is because apparently remaining in a tiny little village rather than fleeing to safety was somehow deemed the smart course of action. Even if you assume the village was bigger at the time, compare the size of Old Crestwood to Lothering. Roughly the same, and likely to have had a similar population density. The difference being that a lot of the people in Lothering were smart enough to flee, and had they had a little more time most of the Lothering citizens likely would have survived because they made the choice to gtfo. Mind you, I understand it can be tough to leave what was likely the only home they'd ever known, but when the other option is let the Blight overtake them, well... He also could have simply refused to allow Blight refugees to stay. Not a wonderful choice either, but less morally grey than what he ended up with.
Having said that, you can't change the past. I remember reading some old adage somewhere, something like "you go to war with the army you have, not the one you want". It was incredibly dumb to stay where they were instead of fleeing to safety, and it was incredibly dumb to take in Blight refugees at all knowing what it does to people, but once those decisions were made they were done and couldn't be unmade. So the options were to sit back and agonize while the sickness spread or make a monstrous choice to save the most lives.
Ultimately, I exiled him. I couldn't in good conscience execute him for trying to make the best of the crappy situation, even if it was partially of their own making.