Okay. After reading all the arguments I think I'm going to have to jump in here and make my own comments.
Pealleon being called a coward and a traitor is predicated on several assumptions.
Assumption # 1. He was not in charge.
Assumption # 2. The Imperials were still capable of winning.
So lets look at these.
I think is clear, he wasn't in charge as far as lines of authority went. But the fact is that it didn't appear that ANYONE was in charge at this point, no matter what the technical side of it was.
Consider.
The Second Death star has been destroyed, killing Palpitine, Vader and Moff Jerjjrod. Executor was lost as was the fleets nominal commander, who frankly shouldn't have been in command but was. Admiral Harrsk ran for it so did other Star Destroyer captians. I recall one from The Bacta War had been at Endor and ran the second the DSII exploded.
So it does look like ships were ALREADY retreating even before the offical word to do so came down the line. Command and control quite simply was BROKEN at this point. The nominal fleet commanders were all dead, there isn't any indication that there was a set up de-evoloution of command. Afterall, this was supposed to be a quick and easy slaughter. The idea of the rebels taking out the Death Star, Executor and a high Admiral is a little extreme, so you can forgive the Imperials this lapse.
The Chimera at this point is clearly having the crap beaten out of it, if the ships CO has just been killed. Seven other Star Destroyers were killed by the Rebels. Even if we're being generous and assuming the two captured were included in that total, we're still down eight Star Destroyers, one of them an SSD and the fleets flagship, plus a communications ship.
The rebels on the other hand still had most of their fleet. The Truce at Bakura says that they had lost only 20% of their forces, leaving 80%.
http://helios.acomp.usf.edu/~pnguyen7/i ... _boxed.png
The shot of the ships accelerating away from the Death Star show they still had a rather large number of ships at this point. Including a crapload of Mon Cal cruisers, which frankly would be expected to outgun ISD's given how much bigger they are, more a pocket cruiser then a Destroyer.
So can the Imperials win the battle in a straight up slugfest? I would say heck no. The Imperials clearly have no Command and Control if Pealleon can order them all to fall back. The rebels match and probably outgun them at this point and are on a high from the destruction of the 2nd DS and Executor and still have perfectly intact leadership.
Now add to that the fact that the loss of the battle meditation *drasticly* reduced the abilites of the Imperial ships to effectivly fight and you can see this is becoming even more lopsided. Ships had already started to abandon the field even before Pealleon gave the offical order to retreat. And this is ignoring the confusion from the complete breakdown in C3, the normal moral loss of seeing the Emperor die with the Death Star and Executor and even some ISD's start to leave on their own.
In short, there WASN'T a coherent Imperial force that could be rallied to fight back against a probably superior rebel force. Pealleon did the only smart thing, he rallied what he had and retreated to regroup and lick his wounds. The rebel ships could frankly leave now at any point, so there wasn't a hope of a decisive victory ANYWAY, ignoring the fact that it's far more likely that the rebels would have simply wipped the floor with him given the state of his fleet.
So is Pealleon a traitor or a criminal? Hardly. He is an officer who saw a battle was quickly going to turn into a one sided rout if he didn't do anything....so he did something.