Of coarse he should have died. What kind of nonsense is this? The death of Jango inspired Boba to follow in his father's footsteps. Jango's appearance in the AOTC is basically a backstory for Boba. It's showing us why he became a Bounty Hunter, and what his personality was as a child.
Anyway, there was no room for him the storyline. He served his purpose, so Lucas told him to **** off.