Sydney having been the one to (unknowing) kill the faux Irina would have been a better story. It would have done less damage to the over all characterization of both Jack and Irina.
It also would have fit with Jack's fear of Sydney being emotionally destroyed if she had found out the truth. With the verision that we saw, it just came off as Jack underestimating Sydney, by not telling her the truth.
She didn't seem all that devastated once she found out the truth. Maybe because she was still trying to figure out what the rest of us have been trying to figure out, how did killing Irina result in a voided contract?