I think they made the right decision by not telling them. However I find the lack of a rescue backup plan unacceptable. They had already lost Challenger, had extra shuttles and a space station and yet the policy seemed to be to not even try a rescue. My guess is they would rather risk a sudden explosion (one screw-up) than a possible failed rescue attempt (2 screw-ups).
Here is an article on that topic as FYI
http://spaceflightnow.com/shuttle/sts107/030523rescue/
I am having somewhat the same reaction as you. The can-do anything attitude of NASA is now, you’re dead, call us when it is over?
I wonder if that secret military spacecraft was developed as a result of this incident.
Without knowing all of the pertinent information pertaining to this incident, it is hard to formulate a way that the astronauts lives could have been saved.