Adrian is trying to prevent a civilization-ending nuclear war. He is not trying to avoid death at all costs, or to minimize casualties. If he was, he would not have needed to blow up half New York. He could have just released a psychic shockwave and killed far fewer people. He is willing to do so to create the scale of the fake threat.
I fail to see how a man willing to kill half New York City, a city full of his own countrymen, would somehow balk at killing half of several other cities people if it meant saving the world.
I don't mind the use of "multiple cities", because it makes sense, in the context of bringing the entire world together. It feels a lot more "global". Yes, WATCHMEN had the "psychic shockwave" element, which is cool and all, but this still feels like more of a "politically relevant global impact" than that did.
Dr. Manhattan being framed again isn't writers making him out to be a moron. Veidt's use of tachyons plays a role here as it does in the comic. Manhattan, who can only see his own future, cannot tell what is happening throughout the story because his perception of time is distorted. In addition to this, he is becoming less and less concerned with humanity. And regardless of how much he knows or cares...he goes along with it in the end, just as he does in the novel. So yeah. He's "in on it", since he knows it's the best possible course for Earth at this point. How does that make him a "moron"?.
And I'm sorry...everyone would entirely destroy North Korea because a weapon they created got out of hand? What are you basing that on? What would be the point of that?
A giant squid/fear over alien attack is also going to be somewhat temporary, albeit in a different context. We can't prove what would or would not happen in "the real world" if "event A" or "event B" happened, so let's stop trying to do so. We're basically just speculating, but not doing so in the context of the world and situations that the novel and film presents. Manhattan going rogue isn't the kind of thing that's likely to BE stopped in any event. He's basically telling the Earth "continue these aggressions, and I will destroy you". Near as I can tell, no country in the world would risk nuclear aggression after what he does at the end of the film version of WATCHMEN.
And people, WATCHMEN makes it clear that Veidt's solution was meant to be a temporary one, at best. He intended to help lead the world into a better place after stopping nuclear war.