It's a moraly gray situation, but he is a Paladin. His duty is to uphold a certain standard, no matter what. He should have let the knights do the genociding.
Someone needs to be there for you, to guarantee your rights. You need to be able to say: "our hero is here! He will never hurt us!".
Same reason the US army had a no one left behind policy. Less sodiers deserting, more fighting bravely, because they know their comrades would save them, even at a loss!