I think she must have had the same justifications as vito for the criminal activities he was doing. She too saw him loose the job (though in the movie he does not reveal it to her, she would have known it sooner or later) due to Fanucci. Raising 3/4 children in poverty is tough. So I would say she was smart.
Regarding the Connie scenario, it was not that she was not compassionate, but I guess it was the social norm for mothers to not interfere in their daugter's affairs once she is married (i.e., the husband "takes charge").
I agree with your final comment that she was not wise. She had no idea what michael was talking about.