At one level, it does seem like a cruel injustice that the Ancient Mariner survives the voyage while the rest of the crew perishes as a result of his crime. However, considering the ordeal that he goes through, the Mariner's punishment can be seen as worse than death in some ways. He lives to experience the terrible ordeal that is inflicted upon him and his ship and witnesses the deaths of all the other sailors. Even after his return, he is cursed with the memories of his ordeal and the guilt of his role in the death of his crew. Although he lives, his life is one of suffering and remorse as he lives in a state of "Life-in-Death." His penance is to wander the earth telling his story as a warning. When looked at this way, the deaths of the other members of the crew can be seen as a mercy by comparison.
In the poem itself, Death and Life-in-Death, which represents suffering, seem to play dice for the souls of the men on the ship. Death wins the souls of the crew while Life-in-Death wins the soul of the Ancient Mariner. As a result, all the men but him die while he lives a long life full of anguish.
This touches on the theme of redemption and transformation. The Ancient Mariner is a prideful man when he kills the albatross. Through his ordeals and suffering, he learns humility. When he finally repents, he is renewed and redeemed, although he will carry the burdens of his past sins all his life. If he were to die, there would be no opportunity for redemption.