Well, there are a few plot holes as regards how powerful the 456 were. Arguably they couldn't destroy the human race, since they would loose that which they sought. Why did they have to get the children assembled so that they could take them? Why couldn't they just grab them piecemeal themselves, or where they just being a bit lazy, and going for the easy option.
For that matter, was the UK government that embarrassed by their previous interactions with the 456 that they thought it was worth destroying Torchwood, whose purpose was to fight alien threats, just to hide this? It seems particularly fuckwitted even for the somewhat self centred politicians portrayed in this series.
It is an interesting question though regarding what else they could have done, and whether morally a government could survive what this one tried to do. Even without revealing what was going to happen to the children, I think the politicians would be lucky to survive, if the public at large ever found out, I think they'd be lucky to find themselves being hung or shot.
With that number of children taken, a very large percentage of the population would be extremely pissed off with the politicians, and inevitably some of them would be in a position to attack them, however well guarded they were (some of the assassins probably would be their guards).
Politically, even when they seemed to have no idea how to fight the 456, giving in to them would probably be unacceptable to most people, and as others have said would inevitably just have ended up as a case of Danegeld, so what would their next set of demands have been.
ps I also think that we will see Johnson back. She has an interestingly morally flexible view of things, so it could make for some novel storylines. And as other have said, they did seem to be positioning her to be on Torchwoods side, and against the baddies aka the Government.