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(2 edits)

Or alternatively, I could have it so that you wouldn't have to fight the avatar at all, just encounter her in increasing glitchy/freaky ways while playing CTF.

As you got locked out of each server, the next one would be glitchier, and the one after that glitchier, and so on. You can't kill the AI, because the dev didn't program that in on purpose, because he couldn't bear the thought of losing her again. He hopes that the gradual glitchyness of each new server would turn you off the idea of playing CTF on the servers.

If, however, you persevered and went into the last server (one with killing implemented), you'd be given a choice: kill the "AI" (and, it's implied, have the ghost of the wife rest in peace), or play the last game of CTF and leave the developer and his wife-avatar in peace.