The "you" is the heckler when she says "you can take the mic." But the "you" in "You all decide" and "You have one choice" is probably the whole audience. "You all" is a way to indicate the larger group, and she says that after the crowd, we're told, applauds loudly. She doesn't order the throng to throttle the heckler, but she's essentially saying you need to shut this woman up, because obviously, no one there wants Michelle Obama to walk out.
10 days earlier, Barack Obama was famously interrupted, also by a female heckler. He was talking about his military policies, and she was anti-war. Obama — amazing many people — went off script, engaged with her criticism, and even said she — or at least her "voice" — was "worth paying attention to"
Obama departed from his prepared script by responding: "Look at the current situation, where we are force-feeding detainees who are being held on a hunger strike. I'm willing to cut the young lady who interrupted me some slack because it's worth being passionate about. Is this who we are? Is that something our founders foresaw? Is that the America we want to leave our children? Our sense of justice is stronger than that."...Obama had his reasons for engaging with his protester. In fact, it could have been planned political theater. It might have made him look good, though it's also easy to mock him for it (or, more aptly, to mock the entire speech for going this way and that, evasively). There's no way the heckler made Michelle Obama look good, especially in contrast to her husband's recent performance. It's all too easy to portray her as arrogant and unconcerned about the interests of everyone who came to the event.
After she was led out of the auditorium, Obama was applauded when he said: "The voice of that woman is worth paying attention to.... Obviously, I do not agree with much of what she said, and obviously she wasn't listening to me in much of what I said. But these are tough issues, and the suggestion that we can gloss over them is wrong."
But let's be a little sympathetic. She began with self-deprecation: "One of the things I don’t do well is this." And I hear in that a reference to Barack: He does do these things well. You just saw him make vivid political theater out of engaging with a woman who yelled at him. I can't do that. I can't risk that.
Even the statements she did make are getting critiqued! She attends these events, gives a dramatic reading of the lines in a competent, actorly fashion, and that's her public role. She can't ad lib policy on the topic of some random person's choice. (In this case, it was some executive order about federal contractors discriminating against gay people.) She only wanted to say: The planners of this event are responsible for keeping perfect decorum, and my appearance is conditional on their meeting this responsibility. They've already failed me, and they need to step up and get it right immediately.
On the spot, she found a way to say that in simple language that did not involve smacking down the heckler or ordering any minions around. She used the language of choice when addressing others and spoke of her own choice as if she were a simple and powerless person who could either continue to speak or stop.
Considering the alternatives, she did pretty well.