On reflection I should have waited for a better spot vs a steaming player.

Here's a very similar hand that happened today. Button is a hyper aggressive, positional player. UTG is fish/gambler.

Party Poker
Pot Limit Omaha Ring game
Blinds: $3/$6
4 players


Stack sizes:
UTG: $354.34
Button: $549.45
Hero: $703.10
BB: $816.97

Pre-flop: (4 players) Hero is SB with
UTG calls, Button raises to $27, Hero calls, BB folds, UTG calls.

Flop: ($87, 3 players)
Hero checks, UTG checks, Button bets $85, Hero raises to $340, UTG calls all-in $327.34, Button calls.

Turn: ($1094.34, 2 players + 1 all-in - Main pot: $1069.02, Sidepot 1: $25.32)
Hero raises all-in $336.1, Button calls all-in $182.45.
Uncalled bets: $153.65 returned to Hero.

River: ($1459.24, 0 player + 3 all-in - Main pot: $1069.02, Sidepot 1: $390.22)

Results:
Final pot: $1459.24
Hero shows Ts Ah 4d 7h
UTG shows Td 2c Kc 3s
Button doesn't show 7s Ac 3c 2h

I was 46% in the main three way pot and 57% in the side pot. I also picked up another $100 in net equity on the turn when he called the rest.

Would anyone who advocates folding the other hand do the same with this hand? Or is this still a bad spot over the long run?