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The point of telling the story was to teach the children that no animal should be sacrificed or hurt, which is basically the doctrine that their religion follows and the reason why so many of them are vegetarian.
However, the tale in itself is important because it really brings out the topic of reincarnation, and demonstrates the preoccupation about being born into an animal or into a human, or into something important or not important.
Hence, although the priest was not that altruistic, he still saw the point in the potential karmic effects of sacrificing the goat, and what could happen as a result of wasting life away.
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