I don't think you even need to come at it by referencing "Space Seed." Marcus knew that Khan was a genocidal maniac and very intelligent, and he decided to wake him up anyway and blackmail him by threatening his crew. That was extremely stupid. Obviously normal Section 31 agents would've been more effective, though I guess they'd have more reason to refuse. And why would the head of Starfleet be running Section 31 anyway? It's a big secret and kept separate from publicly known organizations so people like the head of Starfleet won't be implicated in their activities. I've always been ambivalent with regards to a Federation/Starfleet CIA, but I'm not sure the organization portrayed in DS9 would kill innocent Federation civilians. The name refers to Article 14, Section 31 of the Federation charter which permits extraordinary actions against external threats.