I think the decision to pull him so early was warranted. He had happy feet back there and was starting to force things like he did against Chargers. Plus, because we were down by so much it was a nice, pressure free environment to get Allen some extended NFL reps.
I'd give Peterman one more chance to prove he's an NFL QB. If he flames out again next week against the team that humiliated him last year, then I think you consider trading for a vet QB and cutting him. It's harsh, but he doesn't seem able to rebound when things don't go his way early. Otherwise you're just keeping him to lose on purpose or to be a second year "vet" QB room guy which seems like a waste of a roster spot.