Just because he's a bad guy doesn't mean there wasn't room. To me, that's like killing the Governor in season 3.
The Governor should be killed in season 3 :D

Troy was a fantastic character, there's no doubt about that. His relationship with Madison and Nick was one of the best thing that had ever happened in both shows. But as much as I enjoy Troy, I just can't see him in season 4. Even though that there were plans to keep him longer, Erickson was right about the need of closure for his character. After what he has done to his own brother, to Alicia, to Nick or even Madison, can you imagine that anyone would let him live? Let him build a home with them? A future? (these are the things that Madison truly desires). His actions got Ofelia dead! (and many others at the ranch). Madison gave Troy enough chances to live; she was trying to save him many times. But after his actions, there was enough.

As much as I would be happy to see Troy again in season 4, his journey had a clear beginning and a clear end. And I am completely ok with that.