My view is that even if the crew were doomed, gathering additional information in advance of reentry would have allowed for a better understanding of circumstances, better post-disaster modeling of what went wrong and how the orbiter failed (both in the launch-time foam strike, and in the reentry heat-shield penetration and structural failure).
Whether or not to inform the crew is yet another decision. Astronauts are aware that theirs is a highly risky venture, though with a low sample size, the specific odds are somewhat uncertain, though on the order of 4:100 per human space flight. If you're going to go on a space mission, you'd better be prepared to die.
If NASA refrained from assessing strike damage on those grounds, I feel a grave error was committed.