I may be the only one but I think the Pocket Universe had potential. All the silly silver age stories could have been make less goofy...then there would have been other heroes to defend Earth. If this is a pocket 'universe', then there should be many other planets!
See The-Super-Men-(and-Women)-of-All-Planets
The whole planet did not have to die for the villains crimes to be heinous. That was unnecessary...and probably cheap shock value.
The problem with killing any character is the loss of story potential. Faora is a perfect example. Without powers, she is a psychopathic man-killer and a master martial artist! How many villainesses are as crazy as the Joker and dangerous as Lady Shiva? She is a quality villainess and should definitely have been saved.
I liked Matrix. She should have been Lana Lang, Superwoman; this might have been less offensive to Supergirl fans, I think. Like the PU, her potential was wasted.
So, I am also in the 'No, he should not have killed them' camp. Unfortunately, this was the Era when GrimDark was king and cool...so that's the story we get.
P.S. What about the other Phantom Zone Villains? Kru-El and others? More lost potential.