It's interesting that Tolkien brings up a 3rd possibility of defeating Sauron for good. And that is you just kill him so many times he doesn't have enough "inherent spirit" to reform:
Quote:
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'But that of course did not destroy the spirit, nor dismiss it from the world to which it was bound until the end. After the battle with Gilgalad and Elendil, Sauron took a long while to re-build, longer than he had done after the Downfall of Numenor (I suppose because each building-up used up some of the inherent energy of the spirit, which might be called the 'will' or the effective link between the indestructible mind and being and the realization of its imagination).'~Letter 200
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This seems as if it takes Sauron longer and longer to rebuild the more times he is killed, as it takes up his "will." And if you just kill him enough times he wouldn't have the "will" anymore to reform.
But as
Raynor shows, by the War of the Ring, this is highly unlikely as Sauron had the power and the might where the only way of beating him now was by destroying the Ring.