So putting aside the incredibly high DCs on the traps in here (which I suspect are to get people used to the idea of higher DCs in subsequent content and are based on folks taking the "Way of the Mechanic" enhancement line)...
Why is this quest designed to punish a group that decides to not fall for the double cross?
I sort of understand the "well you kill him now, so he's not there at the end to spawn a chest" story line. But wouldn't it make just as much sense (if not more) that his chest is still there at the end even though he's dead?
And more to the point, if you want to reward high end (and I mean HIGH end) trapsmithing skills, why take away a nice chest from the party that chooses to try and disarm the traps?