I think that the whole point was that originally, Akatosh was supposed to be Alduin. The end of the world, and the birth of the next was not supposed to be a bad thing.
In fact, it's supposed to be a good thing, it's like a cosmic evolutionary process - Lorkhan created Mundus using the powers of the existing gods for the purpose of giving mortals the chance to ascend into godhood themselves, and create more and better gods, which would create the next world, which would create more mortals that would ascend into godhood to create an even better world. Unlike the Thalmor or the Dwemer that wanted to stay snug in their pre-creation point in the cosmos, Lorkhan wanted for creation to advance, not just on a mortal scale, but on an immortal scale.
The stopping of Alduin also may be a "nice job breaking it, hero", moment, because it gives the Thalmor more time to try to destroy time, and hence, stop the kalpa from working properly. I guess that means TES VI is going to involve the player having to stop the Thalmor from annihilating creation completely now that you've gone and given them to chance to do it by completing the game in Skyrim.
I believe Akatosh was meant to devour the world because Akatosh is
time, and Akatosh "devouring the world" means
the end of time. As in, "time ends all things". It may not have ever even been meant as a literal "giant snake eats the world" type of thing (although there are plenty of symbols of the http://en.wikipedia.org/wiki/Ouroboros in this mythology), but rather, that cosmic entropy in such a radically unstable world would force the end of this world, and the coming of the next.
In fact, since Nirn's physical form is made of gods forced into becoming "earth bones", a de-construction of the laws of reality through the breaking of the towers would potentially also turn the gods back into an easier-to-swallow form, so that "eating the world" would become much closer to being literally possible.
This isn't evil, it's just the way in which the world was built - it has been decaying from a mythic to a more mundane world as time has worn on. It needs to be reset at some point before the whole thing collapses. The souls of all beings reincarnate, at that (that's what Sovngarde is for - keeping some mythic heroes around as the first human colonists of the new world when it is still mythic, and great heroes are needed just to survive), so saying that it "kills everyone" is not quite correct, either. It just forces a reincarnation of their beings.
At least, if the Thalmor can be stopped from destroying all existence and mortality, that is.
Of course, that's IF Bethesda's writers can stop writing all over each other's work, and stick with the mythos that they inherited, instead of trying to write the story into some new trajectory that completely ignores established lore.
The 'World-Eating' was a sideshow. Postponing him from waking, or killing him in his sleep, would have made a better plot.
You can't stop the dragon stop, once he's awake. It would be like trying to stop Dagoth Ur, once he's woken the Brass God.
Game Over, man!
Cthulhu - devours 1d6 investigators per round.