I don't think they had to kill her off, but you can't ignore the possibility that the Suicide Squad movie played a factor in Waller's "TV death". Of course it could be simply setting up Digg's wife as A.R.G.U.S head.
Oracle was Barbara Gordon, the original Batgirl, since retired. She was shot and paralyzed by the Joker and thus was born the Oracle. She was pushed by Batman to use her knowledge of "information sciences" to fight crimes. The parallels between Barbara and Felicity are pretty obvious, if not 100% lined up.

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