He did die, chiyo revived him, and she only did that because she had a change in heart while teaming up with sakura, she won't have revived anyone (kage or not) apart from her children, but seeing sakura made her change her mind.
I would have wanted guy to die, I like guy, guy is awesome, but it would have been more epic if he died, gaara should'nt die (at the very least, not in that instance), he still had stuff to settle bout his mom (not knowing his mom loved him and all)