No, Pac did not make a mistake joining Death Row. As mentioned in a previous post, his options were limited to either watching minutes pass by like hours sitting in a cell, or reach out to someone who had the power to rescue him. Besides, Death Row wasn't really corrupted until after Pac had joined. Death Row had success before Pac, and Pac had success before Death Row; however, the two together reached a level of success that they had never reached before the merge. Such success only perpetuated egos left and right. In 1996, Death Row seemed like an empire that would NEVER fall, and while they were simultaneously the industry's most successful and most notorious record label, they felt the need to keep raising the bar in both areas. At the same time, Pac was back to being #1, except now he had something that fans couldn't grant him: muscle to use at his disposal, courtesy of Suge and Death Row. And with the money that comes with success, greed was sure to follow. And it did. And this was when the problems grew worse.
So basically it was a good idea for him to join Death Row initially, since it granted him freedom, and with his freedom he was able to be successful again and drive nice cars, eat good food, drink quality alcohol, and fuck some hotties. It was just a bad idea for Pac to live and breath the Death Row persona, rather than just rapping about it. And it's not like he knew that Suge was going to end up extorting him.