A fascinating question. It has always made me smile when I've heard characters talk about how 'the Federation' is mostly benevolent - but is it? I remember one great analogy posed by Quark in DS9, when he compared the Federation to prune juice. The Cardassian tailor/spy (what was his name?) called it 'insidious', to which Quark responded 'the scary thing is, if you get enough of it, you start to like it'. I sometimes feel sorry for all those planets that entered the Federation in a half-hearted way. I've always seen the Federation as a futuristic European Union; mixed intentions, mixed results, and no one completely happy.
It is wonderful that you raised the Borg issue because until the Borg were introduced in TNG, we always took it as given that the notion of the Federation was good, and that it was 'the' best way to bring planets together. However, the Borg collective didn't really strive for a union, but 'perfection'. I suppose, the question is thus - is the Federation a perfect union?
One would argue not; look at all the wars we had, be it wars with Klingons or Cardassians, Borg or Dominion, and lets not even get started on the internal struggles. As a union, I would argue that the Borg works better - they essentially work as one because they are one, but where does that leave the federation?
The quotation in question is not right about everything, however. I agree that the Federation does attempt to assmilate people, but I would argue that the Federation isn't aware of it themselves, let alone the people they are assimilating! On this basis, they are inherently more naive than the Borg and less realistic - hence the many problems.
Ant.