You make good points. However,

I think the incident was mishandled by the government. The elite armies sent to Tiananmen were supposed to defend the country against foreign invasions, not to "conquer" the unarmed civilians. By sending these troops to perform the police actions, the image of China as a nation was permanently tarnished, at least for the following decades. People around the world turned to dislike China. The damage was tremendous and should not be ignored and underestimated.