The painting people did deserve to exist, the problem was they were born into a world that by its nature was dying from the start and will be gone in 100 years tops. All that Alicia’s ending does is prolong the inevitable and you can even see as they are forced to play a happy little charade for even a few years that things seem to just lose all meaning.
Verso understood this, and even though he felt terrible about doing it, erasing the canvas to save the family on the outside was the correct option rather than not only destroying that family but also keeping those painted souls trapped in a useless cycle destined to end.
him letting Gustave die was his biggest mistake. He as a painted being was both extremely rational but caring at all times, and he was able to invent a device that altered the fabric of the world itself. If there was anyone who could’ve found a compromise and convince Alicia to leave on her own it was him