Not to mention that to keep him around would require justifying his continued survival in more ways than just relevance to the plot. Dude was introduced sleeping in what was effectively life support. The fact that he is on the Dragon Isles at all is a bit questionable.
I'm sure the writers could have mentioned a Blue Dragon artifact somewhere that lets him survive more easily, but what would be the point.
As was mentioned. Him getting to die peacefully has itself strong thematic resonance. The Blue dragons, normally such a troubled race, has finally gotten to the point where they can die peacefully, without sacrificing themselves or being killed by enemies.