Many more lives may be saved, but then people would be calling them judge, jury and executioners and basically monsters for doing it and then they'd just be persecuted by the masses.
It's like with Batman. Sure he could kill the Joker. And everyone might wonder why he doesn't. But the minute he did, he'd get looked at as evil by all of them "OMG! I can't believe he did that." Not to mention, just because the Jedi takes the Sith in alive, doesn't mean someone else couldn't have kill the Sith mid transport "Oooops! He tried to escape!"
The Empire is a failed society due to how they act. You're still alive after this big mess?! *Kills all survivors*
The fear of that happening doesn't make better soldiers, it makes for more terrified and more likely to defect soldiers. And it makes for a smaller army period. Republic should be winning on numbers alone by that point, especially considering the Republic can go "Oh hey look! Freedom! Join our side aliens!"
Though, for a story that's suppossed to be basically about good vs evil, I think TOR went a long ways to try to make the Empire feel less evil than the Republic.
Stop feeding the very obvious troll.