Witholding the truth and allowing a Democrat false narrative to be fronted is not ethical. It's just not disclosing the truth.
I think Chris Wallace is a dedicated journalist and trying to do right. He's just misguided. He's worried about appearing too conservative. But his job is to challenge false statements from either side, and disclose the true facts. The irony is that despite Fox News is seen as conservative, theirs is in truth the most balanced news coverage, and in cases like this, they are often harder interviewing Republican guests, and often give a free pass to crap like this from Democrat guests.