Hmmm...I'm not sure of that. It would be such a dead end for his character...and they've done the whole 'Bates in jail' thing.
And also, in tonight's episode, he said (and I believed him) "I am causing her pain and I don't want to do that - I would rather hand in my resignation now, than to see her suffer".
Now - if he went and killed this fella, he would absolutely be putting her through the worst pain possible!