I think this is a decision you and your wife need to make. Buddy seems like a wonderful little guy, and that he has had a wonderful and loving life. The question that is comes down to is am I keping him alive for my needs, and my needs only?
What's his quality of life? Does he seemed to be scared? Is he comfortable? These, once again, are questions that you and your wife need to go over to determine what's the right thing.
But know this, once you do make your decision, know that it was the right one no matter what. Only you know what's best for your baby.
With that being said, I'd love to see pictures of both Holly and Buddy. They sound adorable