Did the Valar make a huge mistake?

[Maédhros]

Not necessarily infallible.
From Morgoth's Ring: Athrabeth Finrod ah Andreth, The converse of Manwë and Eru

There were many such fëar of Elves who had died in Middle-earth gathered in the Halls of Mandos, but it was not until the death of Míriel in Aman that Manwë appealed directly to Eru for counsel. Eru 'accepted and ratified the position' - though making it plain to Manwë that the Valar should have contested Melkor's domination of Middle-earth far earlier, and that they had lacked estel: they should have trusted that in a legitimate war Eru would not have permitted Melkor so greatly to damage Arda that the Children could not come, or could not inhabit it

There is a difference between Ilúvatar's and Manwë's actions.