It was definitely wrong. It came out years later that Nixon had made a deal with Congressional leaders that Agnew would be impeached first, so that Nixon could hand-pick his successor, then Nixon would resign. In his Senate confirmation hearings, Ford was asked right out: Would you pardon Nixon? Ford said no, the American People wouldn't stand for it. It turned out that when he said this, the deal was already made!
Then Ford pardoned Nixon before he was actually ever convicted of a crime, the first time that's ever been done (AFAIK). This was seen as 'The Ultimate Coverup', because the American People never did get to learn exactly what had happened. For me (I was in college at the time) to know what had happened was more important than seeing Nixon go to jail. It would allow Republican partisans to say, to this day, that Nixon was totally innocent, and that he was hounded out of office by left-leaning media. After all, he was never found guilty of anything, right? So all the charges must have been totally political.
I don't think pardoning Nixon was the only thing that cost Ford a second term. People forget that the economy was seriously damaged under Nixon. In Ford's time in office we had unemployment, inflation and interest rates all in the double digits. Nixon had actually imposed wage and price controls to get control over inflation, which really angered conservatives. But they didn't work, i think largely because requests to raise prices were almost always allowed but requests to raise wages almost never. Economists were at a loss to explain how inflation could be so rampant during a recession. They called it 'stagflation', a combination of stagnation and inflation.
Ford's solution was really nothing. He began a program called Whip Inflation Now ('WIN') which consisted almost entirely of sending a 'WIN' button to anyone who wrote in asking for one. That was about it.
People have forgotten this because of a decades-long Republican campaign to blame the recession on Carter. Just in the way they're now trying to blame the Bush recession on Obama.