He literally rapes and sells a character to people who kill people and scavenge body parts while also taking advantage of other sex workers in need of help, THAT is the reason they give you the option to beat the shit out of him, don't think killing him is even an option.

They even made him sell one of the best upgrades in the game later that YOU CANT GET if you punch him, making you choose if playing nice with the asshole is worth getting it later on.