Michael's ultimate punishment is losing his family. Having him die gives him an easy way out.
OTOH, I never bought Michael being the kind of person who'd vegetate in despair for 17 more years. Even if his new-found religion prevented him from blowing his brains out, he was still seriously ill and should have died quickly once he no longer had a reason to take good care of himself.
Either that or he should have found some other motive to hang on, which would have resulted in a different death-scene. So, even apart from bad make-up, making him old in the scene of his death rang somewhat false for me.
One of the many problematic decisions Coppola made because he actually wanted to cash in on part III _and_ IV, which was thankfully never made.
And re: question of family and losing family, I always felt the absence from the equation of Sonny's real kids and even more so of Connie's kids, to be completely unnatural. They were all half-orphans growing up on the Tahoe estate and Michael would have been some sort of father-figure to them.
And unlike Vincent, those kids could have had a lot of dramatic potential and human connection to the family.
So I can kind of rest assured knowing that the Part III that exists is the best possible Part III that could have ever been made, short of Duvall not appearing in it and Sofia Coppola playing Mary.
Best possible? Surely not. But it is clear that it could have been much worse.
OTOH, that's not saying that much. I mean, GFI was supposed to be made "contemporary" back in 1972 and feature hippies, among other things, so it could have been outrageously bad too.
The one thing I liked about this first Coppola script is the lack of the ridiculous helicopter massacre. Suspension of disbelief, much?
