Exactly what's transpiring on the surface is never made clear.  The game is very abstract in this way, and you have some leeway to interpret it the way you like.  Personally, I view the crew of the colony frigate as an occupation force that "pacifies" the planet and brings it under your control.

I always looked at it as you completely kill everyone on the planet, then send in your own people to start populating it from scratch. In fact I assumed everyone had this genocidal view...

Censorship? Of course, what happens with internal affairs of each empire is up for interpretation.

On top of that, who said populations were necessarily human? For all we know, the Vasari could be setting up colonies themselves.

In that case, at least the destruction of Advent colonies would probably would not generate much negative response. After all, they are the "deviants" that were exiled 1000 years ago, and in the words of the narrator of the Vanilla Sins opening cinematic, "... they were lost to us.".

In general, the events of each particular game shouldn't be considered canon anyway - the game, outside of cinematics, doesn't establish much by the way of canon.

I just wiped out the hole Vasari population in this sector and 2 days later I pull out my fridge and they are all back.