I would tend to agree, but I think it's hard choice. What make's me nervous is the size of Villian's stack. If I had something marginal and was in Villian's shoes, I push. I want to steal the blinds so I get another orbit plus some ante's or I want very few callers.

Villian has the 2nd smallest stack and limps. To me, that means I am getting suspicious that he wants more money in the pot in before he pushes. Hero raises and BB calls. Now if I am holding something marginal in Villian's shoes, and I have some skill (so I know my opponents will be leery of my UTG limp) I would have to start contemplating getting out of the hand in serious manner.

Now, I am not saying fold, but I don't necessarily see folding as a mistake either.