Yes, you should have waited for the entire play to finish.
If the B/R reaches first base and any other runners advance at least one base, drop the DDB and play on. If those conditions are not met, that is when you call time and explaing the available options to the offensive coach.
Your reasoning is correct, an errant throw to home could have allowed another run to score and the offensive coach may be willing to trade an out for multiple runs.
Don't ever assume anything is a "no-brainer" with coaches....my CO story:
NFHS Rules, R1 on first, no outs.
B2 swings, bat hits F2's glove, ball is hit to F4 who fields and throws to first for the out on B2, R1 advances to second. I call time and call for the offense head coach. I tell her that I have CO, she has the option of accepting the penalty or the result of the play. She thinks for a second and says, "I wil just take the play." OK, coach...here we go.
She comes out between innings little while later and says to me...."Should I have taken the penalty on that? What is the penalty?" So I explained it to her and she tells me "Thanks, I guess I just learned something."
Looking back, I probably should have explained what the penalty was and how the options would have affected her team, but we had just had a big session on not "coaching" the players or coaches, so that was my mindset at the time.
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