HAD to keep him alive? Hmm, they must have fixed that in Starfox Assault (the only game of the series I've played) - if you don't save him you just lose points on your score and he's not there when you fight the boss to scan him and show the health bar...
edit: btw, here's a cartoon about Slippy!
(warning - coarse language)
http://www.penny-arcade.com/view.php3?date=2005-02-09