Hmm, good question. I hadn't thought of it, but the way it sounded it seems like that's where they were going with it. Of course, if Fred's soul hadn't just gone to heaven (no hellfire for that girl!) then some of it was still in Illyria, which I think they wanted to expand on in Season6.
I think (and this is a quick guess on my part based on a few things said about a potential S6) that the writers added that in to both add a bit of finality to Fred being dead and extra gloom to what happened to Fred as well as use it to maybe build up to a greater Fred presence inside Illyria in the next season. If Fred just died and Illyria took her body, if her soul just went to heaven like normal, then the whole aspect of her personality fusing at least a bit with Illyria to form a new evolving character wouldn't make as much sense.
Oh god... "next season". It. Would. Have. Fucking. Rocked. :0