I added an edit to my post, btw.
And believe me, I'm trying to understand the actions of characters myself. But in the case of this (and the Martell murders), I see nothing but stupidity.
Again - pragmatism goes only so far. The desire for revenge only goes so far. If Karstark truly was a pragmatic leader, he'd immediately plot to take out Ramsay. He's not a reliable ally. He has proven to turn on his own father out of jealousy. In front of several witnesses whose loyalty aren't even sure. You don't have to be smart to figure out Ramsay is gonna fuck you and your lands up if you don't get rid of him ASAP.
Well it's hard for to debate this from the perspective of the show compared to the books. In the books Ramsay isn't anywhere near this position and everyone seems to think of him as nothing more than a wild dog. A torturer who is bizarre enough to show his handiwork off like some kind of trophy, during a formal dinner no less (when he parades Reek out). But in the show he does seem to embrace his father's motto, something like "a quiet people, a peaceful land"? I probably butchered that quote. But anyways, most of the Northern lords in the show don't appear to be privy to his depravity. And those who do, like Roose himself, seem to turn a blind eye to it because it's just more of Boltons being Boltons.
As far as this show Karstark is concerned: what choice does he have? He's a leader of bannermen. If he even made it outside of Winterfell alive, it's not he can summon other houses to his aide against the Warden of the North.