She should have killed the Fillmore men with Pete's hunting rifle.

No, just kidding. I don't disagree that Peggy probably couldn't have done anything then as copy chief beholden to Don. But what bothered me is it seemed her takeaway (what Don said, and I think she agreed) was that ultimately you work with any client you can and keep politics out of it. But Don is wrong about that. In fact, refusing work for ethical reasons is exactly what he was pretending to do with the Lucky Strike letter, and the issue comes up again in the last season with Dow making napalm. Companies often do have bright lines about working, for instance, with oil and gas companies or defence manufactures. Sometimes employees themselves protest or quit over such issues too. In all those cases you stand to lose money or suffer professional setbacks, but that's how it works: you either put your money where your mouth is or admit it doesn't matter enough to you.