No, domingo not have killed walter It depends on Krazy-8's decision whether or not he still intends to kill Walter in the first place
If he still tried to kill Walter right away, he would probably die given the state he was in. Walter may have cancer but Krazy-8 at the time was in much worse shape than he was. He'd better go home and recover and send some men to kill Walter and Jesse some other time. He's likely to succeed in this endeavor as long as he doesn't try to do it personally.The other option, of course, is that he didn't take the piece of the painting because he wanted to let Walter and Jesse go. Then the series is likely to continue in a different direction