Personally, I think RJ chose to kill her off, specifically BECAUSE nobody (or very few people) saw it coming.  One of the best parts about this series is that nearly every action is foreshadowed and hinted at well in advance.  The only drawback to this is that the people most into the story (people who see theories online and post on these forums) have nothing left to surprise them.

A final book to a series this large needed at least one surprise.  Looking back, I wonder if this was intentional.  Min and Egwene were our two primary 'foreshadowers'.  Egwene never saw visions o her own future and Min was kept suspiciously quiet about Egwene.  In fact, I'm not sure we ever got any Egwene viewings from Min after book 2 (I could be wrong, been years since a re-read).

I think lopozop nailed it.  I don't think Egwene 'died' as people might think.  Physically, she's dead, yes, but I got the feeling that she turned herself into a part of the pattern.

Balefire works by burning a thread out of the pattern.  Depending on the strength, it burns further and further back in time.

If this weave was the opposite then it should solidify all of the weaves around it and stabilize the whole tapestry, so to speak.

When Egwene 'died', her body seemed to literally transform into crystals, which we'd only previously seen as an object that literally held part of the world together.  Didn't she say that the weave wouldn't be as effective (or even kill possibly) one that wasn't dedicated tot eh shadow?  How would it have killed her then?

To top all of this off, there's Rand hearing her voice in his head shortly afterward.  This could be taken literally or figuratively, but considering he was watching the pattern and (in my mind) she BECAME part of the pattern, it makes sense that she could have communicated with him.

Regardless, I didn't see her death coming, but it was nice to have a surprise of some kind.  If anything I would have liked more important character deaths.  I do agree that the FoM scene near the beginning of the book was all over the place though.

Upon reflection, I think it was Brandon's version of Egwene that I liked. She may have been the only character that improved under Brandon. I have a feeling if RJ had been able to finish the series, I would not have liked Egwene no matter how awesome he made her.

Really?  I feel like RJ had a larger world focus, but BJ does better with characters (though this could be tied to the plot demanding character evolution rather than BS himself).  I loved Rand's transformation in TGS.  Egwene improved.  Perrin certainly became more interesting.  The only character I felt died in the transition was Mat.