If he theoretically accepts the deal, on one hand there's technically nothing stopping Valacirca from razing their towns and killing them all while they sleep. This dragon simply has the power to do so once they let down their guard. Or like Will said, betray him in 50 years and then destroy their cities too. He says he's not a threat to innocents, but can the words of something powerful that betrayed even gods be trusted?
On the other hand, if this dragon actually does serve him (I have a hard time believing this considering the very apparent power gap between them), he could be useful against the sealed High King who once devastated the continent. That's the most obvious enemy that Valacirca's power could be used against. Otherwise, Will doesn't need his "services".
But here's the most important thing. Will is a priest of Gracefeel. I love that she reminded him of this fact at the end of this chapter by a gentle pat on the head as divine intervention. His answer was right there: be the extension of her divine will, and fulfill the oath he took. As he dedicated his life to be in her service, it's true: as her faithful servant it really wasn't his choice to make.
IIRC Valacirca and the High King were basically twin disasters that devastated the Southmark continent, which was once filled with Gracefeel's followers. Will is her only priest there because of that catastrophe. I don't believe she would appreciate Will making a (temporary) pact with a dragon that has once deceived even the gods and lived to boast about it. This is going to be a battle.
