Cade isnt that smart
Charming guy, I enjoy his scenes but for a mind reader he made a pretty big tactical error. Damon's vocabulary has one word: Elena. The second he mentioned Stefan going after Elena he should have known that that would set Damon off. Thats literally the number one way to inspire him to do anything to kill you.
A smart guy doesnt just randomly create a problem that doesn't need to be there. Killing Elena doesn't get Damon to become bad. It will make him vengeful until eventually he kills Cade.
I get Stefan's logic. He wants Damon mad enough at him to never forgive him. But it doesnt really help Cade and only would hae caused more problems than it would solve.