Yes, the problem is not because the STV system results in horse trading to shut out the largest party, the problem is parties peddling false promises. Labour before the election explicitly signalling they wouldn't do deal with the Tories, to win anti Tory votes, and then using those votes to get into bed with the Tories afterwards.
If Labour, LibDems could shut out the Tories at WM via STV I'd have thought most would be happy. Because they'd know in advance that that's what they'd be likely to do. Remember the shock of some who voted LD in 2010 to keep out the Tories, only to find them propping them up. They paid an electoral price for it at the next election.