The risk of blowing up a satellite in orbit is that it will leave a huge amount of debris for other vehicles to run into. Space junk is a real problem - a space shuttle windscreen was damaged by a flake of paint from a saturn rocket once. It penetrated several mm and would have fatally injured the occupant of a space suit if it had collided.
It is far better to let it burn up in the atmosphere, the risk of any debris is minimal. And as hydrazine is a highly volatile monofuel, the chances of any of it reaching the Earth's surface is zero.
This sounds like an excuse to test a missile. A similar test by the Chinese was heavily berated bu the US!