It is very hard to know if it would have been better for Great Britain to make a peace with Germany in 1940, but my personal opinion would be no. It would have been a wholesale sell out of all of Europe. The Munich Appeasement proved he was never satisfied and by backing off and becoming isolationist, Britain would just be helping him on his way. Making peace with a tyrant is never much of a solution. Once he's dealt with his other enemies, it's a sure bet that he'll be back for another go at you.