Hate it when series do that.. but don't think that's exactly the case this time.
I mean, if you think about it.. going mad like that can absolutely be a fate worse than death. He'll likely end up like some of those real horrific Alzheimer's cases I've heard of.
I think what Merlin meant is to just let him be, as he might've concluded it would only be more cruel to do that anyways than grant him the mercy of putting him down like a sick dog.