Why did he have to die to seed intelligent life on Earth (if that was the aim of the experiment)?
It's an allegory. Whether you take "Prometheus" to mean, literally, Prometheus from the Greek myth, or a Jesus figure, God, or another, there's a sacrifice by a higher life form for humanity.
It's impractical to leave an actual Titan hanging around suffering, if only because it would then be all too obvious that Titans, or aliens, or God, exist. For the sake of suspense and journey, there have to be some unanswered questions and lack of clarity -- otherwise, there's no story.
In the arts
In cinema and literature, the term sacrificial lamb refers to a supporting character whose sole dramatic purpose is to die, thus galvanizing the protagonist to action and simultaneously demonstrating how evil the villain is.
For the movie, it's an interesting question as to who the villain would be. The ancestors of humans, who create human life? If they created human life, there's an argument to made that it's within their jurisdiction to then end human life. David, whose AI spooks the aliens, and might be why they seek to destroy humanity in the first place? Or, is it just the monsters, the WMD's, which the aliens create? Are we the monsters?
Again, Wikipedia has an interesting section on the themes of the film.
It's in the name of the movie. If you look at the movie as a twisted re-telling of the myth of Prometheus, then the Engineer who seeded life on Earth did so without permission from the rest of the Engineer society. His reasons were indecipherable. However, for his own reasons, he decided to strike out and create a world in his own image, so to speak, giving humanity the gift of fire/life. In the myth, the Olympians were outraged and punished Prometheus eternally because they could not take back the gift. In the movie, you can read it as either/or both of the other Engineers (the Olympians) attempting to take back the gift of life OR since all life sprang from Prometheus then by destroying much of it they are effectively punishing Prometheus.
At least, that's my interpretation.
Edit: Maybe I've misread the question, so let me try this slightly differently. If I'm understanding you correctly, the question is not why did the Engineer do what he did, what was the reason behind all the stuff. You want to know the technical explanation for why the Engineer was required to die in order to seed life.
Well, the answer is: we don't know. We can't know. You can argue that he could have grabbed another Engineer and forced the fluid into that dude, dissolved him and skipped away. Or maybe all organic matter would have worked.
Regardless, the way I read the Engineer's reaction was that he absolutely knew what was going to happen going into it, which tells me that in his mind 1) this was preferable to the alternative in some way, or 2) there was no alternative. It could be that this was simply a blind spot in the Engineers biotechnology, which doesn't seem to give much of a crap for saving lives. Maybe he was a scientist who designed an altered version of the black goo which would form non-homicidal (if you can call us that...) life and knew that the only way for it to work was the way he did it.
But it boils down to: they're aliens. We can't know, based on what we saw, why any of them did anything. Imagine you're an alien landing on earth with no humans around. You find multiple dwellings with ceramic features. One seems to have the purpose of moving water from a large height to the bottom. Another moves water from a lower height down. A third is a basin with water which empties and refills itself with water. That would be pretty darned weird. Who knows if you would ever figure out the real explanation? Scott decided not to spoon feed us every single answer to every single mystery from the movie.
I assume, this comes from the rules, traditions and the way of thinking of the Engineers, maybe to emphasize the importance of the act or responsibility for it.
It would be difficult to believe this has been technically necessary, unless the Engineer was doing something forbidden in a secrecy so has been restricted in how could he create the life. But this contradicts the alternative beginning where he was not alone.