That's ridiculous -- of course benefits can outweigh psychological side-effects. Usually you'd want those benefits to accrue to the person suffering the side-effects, but living in a civilized society means accepting that sometimes the good of the many outweighs the pain of the few. If a vaccine for a deadly, highly communicable disease can completely stop transmission then I think it's perfectly ethical to require everyone to accept it or isolate from those willing to do so.