it was partly because he couldn't, he didn't think it would be a good idea as he might but his lizard in danger due to his disturbance to the village, also because his scales curse anything with him long enough and it actually becomes a plot point in this dessert arc IIRC
I really hope that slime really f*ucking died. I find OP villian that can't die because of plot armor extremely frustrating. Garou from Murata's OPM is bad enough, really hope it doesn't show up here.
The slime did survive and eventually becomes a demon lord that Irushia has to defeat later on. It doesn't occur to him who it is until he meets face to... uh... face? with the now demon lord slime. The battle will hopefully be given justice in the manga, but I suspect we won't see that scene for quite some time. (perhaps in five years at this rate? who knows).