Having Saddam in exile wouldn't have solved the problems the US said were necessitating a war. Further, he'd just be a distraction as we tried to restructure the government, only this time without a strong military presence trying to maintain order. The same fundamental divisions within the country would be present, and (all other decisions being equal) the country would fall into the chaos it's in now--only IMO quicker.
While I don't buy the argument that Saddam was being effectively contained, I do agree that at the very least he didn't like sanctions on his country and was trying to get them lessened; while at some point this--in addition to his long-term goals of being a nuclear/etc power--would need to be addressed, there was no impetus necessitating immediate action, while we were still in Afghanistan, while we were still trying to focus on global counterterrorist actions after 9/11.