Did Gollum deserve death?

[Morwen]

But also it seems to me that mention of 'fear of fire' by Gandalf was some form of admission of guilt

I didn't see it as an admission of guilt. What would he have been guilty of? He simply recounts to Frodo what he had to do to extract any useful information from Gollum - he threatens but doesn't actually harm Gollum.
Besides doesn't Gandalf go on to tell Frodo that even with the fear of fire threat there came a point when Gollum refused to say any more and Gandalf perceived that he (Gollum) was haunted by some greater fear? And, perceiving that, Gandalf lets Gollum be and leaves him in the custody of the Wood Elves, asking that they treat Gollum kindly. In the circumstances I think that Gandalf struck the best balance that he could between getting Gollum to give him necessary information and while at the same time not being unduly cruel.