I came to the same conclusion about Felt. After confirmation about his numerous leaks, President Nixon was correct in passing him by when it came time to appoint a new FBI director.
What's interesting is that, even before Watergate, Nixon wanted to fire him. Haldeman talked him out of it because Felt had too much knowledge. If Felt were fired he'd just spill all the beans he could in retaliation. The irony is that, by keeping in on as #2, Felt had found even more beans to spill.
I'm actually more mad at Nixon than I am at Felt. Knowing Felt's leakiness should have inspired Nixon to keep things on the up an' up. Ronald Reagan once said "Don't trust me, trust our values... and hold me responsible to living up to them." Felt was Nixon's Jimminy Cricket and Nixon ignored the warning thinking he was clever enough to get the best of the FBI's frickin' Deputy Director.