Considering they talked up the whole "player being able to walk through the game playing the diplomat in all situations," you'd think they could come up with a situation in which Mr. House continues to live, secretly. The NPC's themselves walk around saying "How can you be sure he's dead? Nobody's seen him in years," or whatever. I mean, you don't even get to tell him you were sent to kill him until you've already done the damage anyway.
Also, you're only partially right about not having to destroy the BoS; with the NCR, you can negotiate, but Mr. House wants them dead, no exceptions. Mr. House is kind of a bastard. I'm kind of surprised you get bad karma for killing him. I guess he is the "last hope for humanity..."
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