Yes, I think peter needed to die. His death changed the ultimate universe, ultimately "ha ha" for the better. His death is what triggered the most change in the ultimate universe. Its become more dark and dystopian. Well, the ultimate universe was always a little dark, but peter parker was that one shred of hope in it. Then that shread was gone, or so we thought. Older heroes had to change their ways. Newer heroes like Miles had to rise up and take charge in peter's stead.
Unfortunate as it is, yes. Peter simply had to go, and this is coming from someone who doesn't like Miles.