He is a lazy hedonist and that decision made sense. The demon lord wanted to RULE the other world, not turn it and all humans into ash. Which at this point seems to be Erd's overwhelming desire.
Lies. Those are just the reasons he told himself. We all know why we really picked that option and deep down, so does he.
Nuking the city was out of character and without that the angel wouldn't have been free and powered up.
And choosing to say no to the old man in the dungeon was also stupid and out of character and led to the situation that got us to the point of gigadyning a city.
Look, I'm being a bit tounge in cheek about all this, but these two options were practically irresistible.
This isn't a stale strategy/resource management game - though we could play it that way, sure - this is an COYA about being an absurdly overpowered creature with both the will and way to conquer or destroy nations.
We had to let loose and to test our power at its limits at least once in this game.
Granted, it's a shame it resulted in us losing some of that power, but we are still an insanely powerful human and we have Rin's dad's heart as well, so there may be a way for us to gain our powers back or else gain some entirely new powers.
I will say it's unfortunate that we've lost all the relationships we had tried to build though, but that happened over time due to poor choices at every step of the way:
we got a waifu's neck broken, losing her and angering the kingdom
we tried to be fancy and teleported out of the camp - lost our jail bai--I mean, our young ward
we didn't go visit the nazi girls on that moon (ok, treave was probably joking about this one)
we messed up the voting with the Bee
We didn't take Rin with us to see the old man
we said no to the old man, so now Rin's gone and before she left, she got everyone (more) mad at us
we tried to save the dumb goblin instead of the slimes
Maybe it was possible to salvage the relationship with Methus, but it was also really fun to kill them all and then make some babies over their burnt crater of a city in the most violent, earthshaking courtship the world has ever seen.