I liked this plot twist, even though it's very sad. It made me feel like the stakes were high for my character (who is trying her best to be a good person). But then I enjoy playing characters with intense inner turmoil.
As for Alfira, I've been trying to find out what her "storyline" past singing the song in the Grove actually is? I've heard that she can show up in the Moonrise area (and potentially die randomly there), so is there actually a greater plotline you miss out on if she's dead? I've heard you can get items from her or something, but I'm more interested to know if she actually has a plotline, or if she's just a flavor NPC. Granted, I'll find out eventually when I play a non-DU to Act 2.
It would have been more impactful if Alfira could actually be recruited into the party, IMO.