I find it okay as a solution... if it is well written, and fits the story, it is more than just a five minute cameo à la "enter the stage, don't steal too much time, but bring your fans". I thought Vimes was a good sidekick character in MR, it worked well... The worn old policeman exercising everything he's learnt about politics during the last years without rubbing it under our noses, contrasted the cunning young soldiers quite well. He also became proof that it is not a final solution for veteran characters to end up as a cameo guest in later books, but more a way to tie one time settings into the bigger overal setting of the Discworld, something I like because it makes DW feel like a huge setting instead of a label for a number of loosely related places where the stories happen to take place.

It depends on the story really, and the writing... A character death can, after all, be an overly dramatic end in an attempt to wring some drama out of a character that has learnt every trick the author was able to come up with, or it can be really good though cruel writing.

As in Granny's case: I prefer her in guest appearances than dead. She was probably also a means to tie the new setting of the Chalk into the overall Discworld.
One thing I like about the Discworld series is that I never got the impression that PTerry was writing a character to death -in more than one aspect- because he happened to be popular at the time. That's different to a lot of B class fantsy series', where the marceting machine alone would have dictated 12 Granny or Rincewind novels, 12 Vimes novels, and no "one termers" because that's not what readers asked for.