The big rock was an extended hostage situation. Vivec could have done anything else with it other than leave it suspended in the sky just before impact... but anything else would remove the ongoing awe and fear inspired by people on Vvardenfell seeing it every time they go near Vivec City. The implication was that if anything ever happened to Vivec, there goes the island.

The subtext is that the hostage situation eventually killed the hostages, but whether or not the Hero of Kvatch saw that as tragic or unimportant or acceptable (or even a surprise) is left open because Sheogorath lol.