I would agree - if I thought at all that Lois would ever out Oracle. Part of the problem of the story IMO is that the reader never gets the tension and fear Babs is feeling (and by reader of course I mean me - :) ) because we never think for a second that Lois has any intention of doing what Katrina wants. Spy Smasher does not know that Lois is married to Superman and her loyalty is first to him and his friends (most of whom she knows very well by this time - this is near the end of Gail's run so it's not that long ago in DCU time). But Babs should know this by now. She's been Oracle for how long? And Batgirl for how long before that? And she's super-smart and knows everything with her photgraphic memory and so probably knows all about Lois - and the fact that Lois has never, NEVER, written a revealing story on one of Clark's Superfriends Crew (especially the Bat-Crew since Lois is also friends with Bruce, something Babs also should know).
I think the Mutually Assured Destruction thing works only if you think both sides are actually willing to pull the trigger. As it is, Lois (and the readers of this issue) know Oracle is safe from her pen - because that's who Lois is. And even if on the Bizarro World chance Lois would run that story - there is no point in Babs putting that picture on the web as she claims she would. If the story runs, Babs is finished (as you say) and on the run from her enemies and need all the friends she can get. The super-hero community will be mad at Lois and Batman may prepare retaliation (he does own some of the Daily Planet, he could spike the story anyhow) but Lois is not part of the cape community and outside of 2-3 people her best friends are outside it (and her husband is Superman, attack her and he will go after you even if he thinks Lois is wrong). However once the story is in print, if Babs then exposes Superman (and this photo I think makes it clear he is Clark Kent, tie-and-all) what does she gain from that? Zero. Except now instead of everyone being mad at Lois, everyone will turn on her (and if she purposely outed Clark, I do think most of the Bat-Crew including Bruce would indeed turn her on her). So we're left with a scenario where Lois never meant to out Oracle in the first place and Oracle's threats are empty because even if Lois ran with the story, her exposing Superman would not help in her any way.
I mean, I love Gail's writing, but I think this whole sequence makes Babs look dumb, unprepared, and not knowing who she is dealing with. And even if it seems Lois is toying with her (with her Pulitzer Prize reporter face on), I think Lois comes out looking the bigger woman because I really do think Lois came into this meeting thinking (as others have said) that Oracle would know her and where her loyalties lie from the start. That's the problem I have with it at least.