It's been a long time since I read Foundation, so I'm not sure if there's specific context provided right around the provided quote. The entire series is about an organization trying to mitigate the collapse of a galactic empire, and how its goals are primarily achieved through guile and subtlety, rather than trying to win wars.

I believe it was along the lines of "actually solve the problem".
There's so many diverse causes of violence that there's not one solution or alternative. Resource shortage? Find a way to fix it. Land shortage? Find a way to use what you have more efficiently.
If you can't solve the problem you're by definition not competent.

I don't believe he thought the incompetent should meekly roll over and die, but rather that violence was a failure to solve the problem correctly. If you find yourself in a position where you need to do violence it's not because you had no choice, but because you didn't know what that other option was.

It's worth remembering he was one of those people who said exactly what they meant. If he meant that violence was unacceptable no matter what he would have said that. He was a pacifist in the "what if we don't invade Vietnam?" sense, not in the "I will let you beat me rather than raise my hand in anger" way.