First, because it shows how O'Brien views the war and what he had to do there, how he didn't see the vietnamese as the enemy; he saw them as real people with their own lives and hopes and dreams. He had just taken away that young man's future, and it was all for nothing. That soldier was not even a threat to him, it was just an instinctual response to throw the grenade and kill him, and in O'Brien's mind it was all such a waste. The American soldiers were there to fight the Vietnamese soldiers, as in America vs. Vietnam, but in reality it was just young boys fighting and killing other young boys that they had no personal vendetta against whatsoever. Neither side wanted to fight and die and kill each other for nothing. They just wanted it to be over. That ties right in to the second reason I think he says so much about the dead man.
I think he feels an overwhelming sense of guilt for what he had done. And I know from my own experience that when a person feels so much guilt they tend to just dwell on the situation in their mind and get completely carried away by the feelings of remorse and shame. I think O'Brien is doing what any of us would do if we had done something to cause such guilt. He's imagining the young man as delicate and scholarly and nonthreatening because it only adds to the guilt he's feeling. If he imagined him as a battle-hardened soldier who enjoyed the war, the death wouldn't be so sad, to us or to O'Brien. He has to imagine him that way in order to feel the guilt, and for us to feel the guilt and the worthlessness of it all. It makes the story very poignant and very true. It's easy to feel exactly what O'Brien is feeling in that moment and even later when he just remembers it. I thought this was a great example of how he tells us a story that absolutely cannot be true--there's no way he could know those things about the boy--and yet it leads to a knowledge and an understanding that is absolutely 100% true. I love the way O'Brien writes, and I thought this chapter was perfect.