Not necessarily. He could come back as a ghost and have a kickin' afterlife adventure. Plus, once he's done he'd just get reincarnated again when Hyrule/Holodrum/Labrynna/whatever land needs him again. Saves a bit of work for the Goddesses.
In addition to that, it'd give some interesting...
Firstly, you shouldn't believe it. It's an interesting rumor to be sure, but it's just that. A rumor. The only evidence we have for this game at the moment is a picture of swordless Link in the same style as TP (which may not even be incredibly accurate as they've said that they haven't...