That happiness modifier is okay, but I'd also add a modifier that affects an empire's relations with other empires. Higher for the targeted empire, of course, but the other neighbors should be a bit wary of someone who nukes planets til they glow.
Adding an intelligence project called "propaganda" to mitigate this would be nice. You know a load of bs saying that your commanders on the field exceeded their orders, a nice being like you wouldn't do such a thing, etc.