My preferred way to handle his return would have been: "Don't". He is a boring one dimensional jerk. It's not easy to make dragons boring, but HW managed to pull it off rather nicely.
Okay, but who to write off? Although Minfilia is alive again she has been sent to the first shard so she won't be around. Y'shtola is the poster girl, Yoshie-P said he has plans for Estinien to grow and later officially join the Scions and Yugiri just got her new voice. I'd say they have plot armor for now. Yda will probably play an important role so I think she's unlikely to die and there is no chance Aymeric will bite it. Cid can't die either. We need a cid. Honestly I can't see anyone dying. Well Livia maybe. F'lahminn will likely won't do anything so there no point in writing her off and since we are moving out of Dravania we will likely see less of Matoya. If any at all.