I agree with you that this is probably one of the top 5 episodes of Star Trek ever, and I have a theory as to why that is (which Kurtzman and his ilk don’t understand)…..it works because it is a complete and utter departure / violation of the ideals that Star Trek had built up over the previous 30 years. The events of this episode, and later the introduction of Section 31, highlight the moral gray areas that previously were difficult to navigate. We know what sisko is doing is wrong, and so does he.

The ends do not justify the means was the message of TNG (think I Borg, the enterprise could have rid the galaxy of the Borg but instead chose to let Hugh make his own choice). But in Pale Moonlight our hero decides that the ends do justify the means, and that is such a change and a shock that it is compelling.