Always? I don’t know about that. In a great power rivalry, a stable dictatorship allied to a rival is worse than a failed state in that rival’s backyard.
But to avoid going off on that tangent, I agree that in 21st century Middle East-North Africa, stable and unfriendly is less bad than failed.
However, in the case of Libya, it’s not clear that was the choice. Perhaps Qaddafi would have quickly put down the uprising and reestablished control. Or, as Syria shows, the real choice might have been between two different types of failed state. In that case, a protracted state v. rebels phase is arguably worse than a fight for control after the government collapses.
Yes, NATO allowed the uprising to succeed. But that doesn’t mean without NATO intervention Qaddafi would have succeeded.