Why didn't Tavas just kill Erma and pass her death off as an accident or as a legitime attempt of self-defense? Given the circunstances, no one could doubt his version, or maybe because he didn't want her to become a martyr?

Now his eyes are truly open to the kind of regime he serves... or perhaps served?

No, I don't think so. I think he knew all along, but accepted it as "the price for victory". Too bad he didn't think of paying it himself.