I don't know what system you are playing on, but on xbox there is an achievement called "Oblivion Walker" where you have to collect every Daedric artifact. The Skull of Coruption is one of the artifacts, and as you know, is only obtainable by doing the evil deed. If you let him live, you're essentially losing this artifact and the achievement is unattainable. You're killing off a possible friend and companion, but there are plenty of other other friends and companions to make in the game so no worries. (Gosh, that sounded evil)
If you're into roleplaying, this would be more fitting for an evil or morally grey character playthrough and might not really make sense with a good character- but it's your character and the choice is ultimately up to you ^_^