I always found it weird as to why he had to kill him just like that. Couldn't he have restructured Roshark's brain cells so he would lose any memory of the incident or something like that. I mean it is Doctor Manhattan we're talking about. The from what I understood pretty gruesome killing seemed unnecessary.
And even if Dr Manhattan couldn't do that, just who would believe Roshark?
Well, Manhattan, for all his power, was still a human inside... human frailties and foibles and so forth (as clearly illustrated by his relationship with Laurie and with Janie before her, among other things).
If anyone ever did a sequel to Watchment (which I'm OPPOSED to, mind you, unless it's Moore doing it and he's got a story he really thinks needs telling!), the only way I can imagine it happening would be for Manhattan to be the "villain." Problem is... I can't imagine any way that the "good guys" could win. So it's best that he do as he says, at the end, and goes out to explore the universe, leaving Earth alone.
But given that... why kill Rorschach? Well, for one thing, it was pretty clear that Rorschach was, quite literally, ASKING for it. And it's also quite clear that Jon Osterman ("Manhattan") had stopped thinking of morality the way we do... remember, "a dead body and a live one have the same number of particles." For him, it wasn't much different than smacking a mosquito on your arm. Yes, you could "save" it but if it's an annoyance, why bother?
Rorschach was threatening to cause trouble. Jon wanted to be able to abandon his self-chosen responsibility to "keep the peace" and recognized that Adrian Veidt's plan would let him do so without any evident moral consequences. So, Rorschach was the only one who really stood in the way of what was left of Osterman's conscience allowing him to bail, wasn't he?
And Rorschach gave Jon exactly the "moral opportunity" he wanted... he ASKED FOR IT!
The really scary stuff in the book, to me, was never Adrian Veidt. It was always Osterman. Basically, Osterman was Gary Mitchell but he stayed "human" for a little longer before deciding that he ought to be God.
("Roshark," by the way? Isn't that one of Aquaman's villains?

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