By erasing Benoit, WWE is erasing a good chunk of history within their fictional universe. This creates a black hole where his and other wrestlers storylines once existed. And since the true wealth of the WWE rests in its possession of the world’s largest video library of professional wrestling, creating a near limitless resource for DVDs, merchandise, retrospectives, and repurposed programming, you can see where creating a black hole could represent a problem for the company and its shareholders. Especially if this decision to delete a wrestler established a precedent that would be followed and expanded to include performers who did things the company, its shareholders, or the public frowned upon. Because they’re not only deleting the offending party, you’re also deleting the other wrestler’s match as well, which limits the exposure that wrestler has, hampers his or her ability to sell merchandise (which is how WWE determines which wrestler to put their efforts behind), and damages one of the key assets of the company.
You should not do what WWE did. It’s difficult to fault WWE with their decision in the specific instance of Benoit, and I don’t fault them from a personal standpoint. But from a storytelling perspective? It’s not a decision you want to make. Even I embraced the time I worked as a Mall Santa to make ends meet during a particularly difficult time in my life. If you ever encounter a problem with the story you’re telling the public, acknowledge the problem. If you’re responsible for the problem, explain how the problem occurred and how you’re going to fix it, then fix it and talk about how you fixed it. If you didn’t create the problem, and the professional complainers or the media are creating a circus out of it, ignore them. The second something else occurs that’ll generate pageviews and ratings, they’ll go away.