Draco failed to kill Dumbledore due to whatever reason. Why didn't Voldemort kill him? It could also be a punishment to Mr. Malfoy.
Several reasons spring to mind:
It keeps Lucius and Narcissa under his control.
Draco was originally tasked with killing Dumbledore as a way to punish Lucius for his failure at the Ministry. His parents believe that Voldemort will kill Draco if he fails, but will show mercy if he manages to succeed.
As long as they have some hope that Draco will survive the war, they’ll remain loyal to Voldemort (however reluctantly). Killing Draco is the nuclear option: it’s hard to think of something they fear more than that. He’s callous, but he isn’t stupid: keeping them loyal is more important.
And as a corollary, consider how this looks to other Death Eaters: the Malfoys – one of the proudest magical families in Britain – failed Voldemort and now their spirits are completely broken. That’s a pretty good motivator not to screw up your next assignment.
Draco found a way to smuggle Death Eaters into Hogwarts.
This alone is a pretty remarkable achievement.
In the first book, Hagrid tells us that Hogwarts is one of the safest places in the world. Dumbledore crafted many of its defences, and while Voldemort doesn’t like him, he does respect Dumbledore as a formidable magician. The number of adults who have penetrated its walls can probably be counted on Silvanus Kettleburn’s limbs. Even at the height of his power, Voldemort didn’t try to attack or infiltrate Hogwarts.
A teenager who found a hole in Dumbledore’s designs? That person probably has a lot of useful knowledge about Hogwarts, and you want them to keep them around. And when he’s not stressing about killing Dumbledore, he might make a very useful spy.1 You don’t kill somebody successful like that.
The only other instance [edit: that I remembered; see comments for others] where Hogwarts was entered by stealth is Sirius, who used the fact that he was an Animagus. Draco’s solution could allow an arbitrary number of people to enter: much more impressive.
1 We don’t know what Draco did during his “seventh” school year. I suspect he may have been deployed as a spy for the Carrows at Hogwarts, but that’s just speculation.
It’s a waste of magical blood.
Whatever else he is, Draco is a pure-blood wizard. If Voldemort truly wants a society of only pure-blood magicians, then setting them impossible tasks and killing them when they fail is a poor way to do it.
Addition to alexwlchan:
Voldemort never was the type who killed someone valuable for violating his orders.
This does not prevent him from torturing the same person, but he was careful to conserve his forces. After gaining his new body and summoning the old Death Eaters, he killed noone despite their profuse denial, the unwillingness to search from him and their impartial games during the Quidditch Worldcup. Remember: This actions enraged Barty Crouch jr. extremely:
I asked you[...]whether he forgave the scum who never even went to look for him. Those treacherous cowards who wouldn't even brave Azkaban for him. The faithless, worthless bits of filth who were brave enough to cavort in masks at the Quidditch World Cup, but fled at the sight of the Dark Mark when I fired it in the sky.So Crouch and Bellatrix/Rudolphus would very likely killed the offenders for their proven lack of allegiance. Voldemort in fact was aware that he would have weakened himself extremely by doing this, so he didn't it. Voldemort himself never cared for loyality much because he himself was never loyal to anyone as Dumbledore remarked:
He preferred to operate alone. The adult Voldemort is the same. You will hear many of his Death Eaters claiming that they are in his confidence, that they alone are close to him, even understand him. They are deluded. Lord Voldemort has never had a friend, nor do I believe that he has ever wanted one.This does not mean that he will refrain from killing. As Legilimens he would know if someone would feel secure and kill him at once.
Voldemort was triumphant.
It didn't matter that Malfoy failed as long as Dumbledore, the worst enemy and the only one capable to put a foot into his plans, finally died. No wizard or witch was even remotely comparable. The Ministry were Morons and were never able to put up much resistance and crumbled after a short time. So he was able to get to full power. His wishes come true, so why should he kill Draco ? He could use Draco always as another pressurizing agent and...perhaps if the Malfoys finally pass themselves again, he could reuse them. You must see it from his perspective: He was the absolute leader and Harry Potter and his known friends were fugitives with very little power. Only the capture of the Cup jolted him out of the comfort zone, it was inconceivable how this....deadbeat with his long list of Exceeds Expectations grades...could shove this defeat down his throat.