I think it was implied as heavily as the comic code would allow at the time, but I could be mistaken. Its been...maybe five or six years since I read the story.
Perhaps 'moral failing' is a little strong, but he recognized almost immediately that it was a deeply regrettable action, iirc, hence why he pushed Betty away afterward (and not in the nicest way, I think he implied that he only bothered with her at the time because he had been rejected by MJ. It was a lie, but still not very gentlemanly). He recognized that he was only complicating an already messy situation and was adding to Betty's emotional turmoil, giving her hope for a relationship when there really wasn't any. His attempts to comfort a friend ultimately caused her more grief. I think it was a mistake on his part, and I do think pursuing a relationship with someone already in a relationship with someone else, no matter what your shared history, is a pretty big no-no, but that's likely my own bias speaking. I don't think it makes him a bad person, just someone who allowed his own romantic nature to cloud his judgment.
I agree that issue 122 is a more clear cut example of Peter acting in a less than ideal way.