After finishing the whole series (minus the Dishonored 1 dlc) I'm not quite sure what to make of The Outsider. I appreciate the twist that he isn't really "the root of all evil" but that doesn't make him an innocent mortal by any stretch. He's an abused source of power, but also a powerful actor in his own right; you can't say you're not part of the Chess game if you're the one who decides what pieces are allowed to play.
I think giving this 1000 year old trickster a final death is something you can morally justify, even if the game portrays that option as the more cynical ending.