They should only be allowed to kill her if it resulted in her becoming a goddess or something. She could be even more powerful, but, like the faceless one, she could be confined to one particular place (Grayskull) forever. She could protect the orb and Teela could protect Grayskull. Mother and daughter working together.
I believe that some elements of the story need not be explained or reached. You should always leave 'em wanting more. In the 80s, we survived never having Teela know about her mother, or Randor knowing about Adam, or even having a tangible view of what what "the power of grayskull" actually was. It is much better that way. MYP were great, but they almost need to be reminded of some of the basics... (i.e. having abbrasive heroes - Duncan, Fisto, Zodak - does not allow the viewer to "bond" with the character. Not all heroes have to be nice, but they have to be likable - even if you love to hate them. I don't think MYP planned for us to hate Duncan, Fisto OR Zodak, but that's the result they achieved).