Should the Party Have Killed Arrigal?

Arrigal is an assassin and a theif. He attacked multiple party members, nearly killed them, and took a lot of their stuff, including much of the treasure they had earned over multiple quests and adventures. Granted, Arrigal had his reasons for doing so. He had stolen from the party in order to steal back stuff that he thought they had stolen, and he attacked them only to prevent them from preventing him from stealing back what had been stolen. And, yeah, he nearly killed them, and he could have killed them, but he deliberately didn't kill them, and he made sure to do no lasting damage. Frankly, the party got off easy. Had he wanted to TPK the party, he totally could have. Yet, he let them live long enough to learn he had stolen their stuff, and they tracked him down, cornered him, and had to figure out what to do with him.

It's worth noting that, by the time they grabbed him, he had already returned the stuff he had taken from them. As it turns out, his suspicions of them were only part correct. Yes, they had stolen from him and his group, but that was the only major act of stealing they had done. Once he learned this, he returned their treasure to them and attempted to slip away with his life. And when he failed and was captured, he cooperated with their interrogation to the best of his abilities. See, most of the party knew nothing about the theft that had caused Arrigal to attack the party; they only knew that he had attacked them, and they were understandably reluctant to let that slide. But after getting their stuff back and learning that he had only stolen from them because he thought they had stolen from him and others, they let him go.

Morally speaking, this was the right thing to do, but strategically speaking, I'm not sure this was a wise choice. Arrigal still has a bone to pick with the party, since the same theif who caused this whole problem in the first place also picked Arrigal's pockets while they had him captured. The party is too dangerous to risk crossing again, and it'd be wise for him to cut his losses and get out while he can, but he'd like his stuff back, and I would loathe to reward the immoral actions of a selfish theif. Perhaps Arrigal should steal his stuff back. And if anyone gets hurt trying to stop him, then that'll be a shame.

But I'm probably not going to do that. Arrigal is probably just going to leave the campaign setting and never interract with the story again, so he'll be safe from the party's misguided retribution. Or maybe I'll let him fully turn toward villainy, over-react, and commit overkill, the way only an assassin can. It's possible that I'll have Arrigal become a recurring, fatal threat to the party. Perhaps they should have killed him when they had the chance, before he kills them.

But he won't. As before, the knowledge of the potential to get petty revenge is probably enough for me. I don't actually need to kill player characters or actually, permanently steal (stolen goods) from them in order to enjoy this game. For me, it's good enough to know that Arrigal survived and can continue his story elsewhere, never intersecting with the party's story again.

So, no, the party should not have killed Arrigal, and I'm very glad they didn't.