I would agree that the precedent is not optimal. but terrible? that's just one opinion. There are other very bad precedents and factors at play that you are not paying enough attention or considering properly IMO.
I think that the precedent of allowing an economically illiterage smug clique of corrupt devs to continue degrading the monetary quality of Bitcoin, not fixing bugs, leaving open attack vectors and exploits, increasing the legal and moral risk, encumbering nodes and endangering node decentralization into the future... those are worse. WAY worse precedents. Each one of those is worse IMO than what you think is a "terrible precedent".
The change is good you accept that. And the only possible bad outcomes would be real in extreme scenarios where enough mining pools get misled and stuck in rigid ideological restraints like the ones you so effectively spread. If the support from the broad community in pressuring the pools to signal BIP110 is strong enough ALL the doomsday scenarios go away and we have a clean non disruptive upgrade that would be good for Bitcoin and the world.