The Leading Player and the members of the troupe are not meant to be actual characters, but rather, manifestations of the innate desire for recognition within every human. Therefore, the Leading Player is not a villain per se; (s)he is merely the element within Pippin's mind that prompts him to give in to the desire for power and fame, and, when that fails, to consider suicide. That he does not do so demonstrates his maturity and acceptance of reality at long last. When young Theo stands onstage alone at the end and the troupe assembles to entice him, it indicates that he will have to gain life experience and reach maturity by overcoming the same naive and self-centered impulses that Pippin did.
WMG / Pippin