Keep it clean, folks.
There should at least be an option to lie.
"Oh, yeah, that Paarthunax fellow? Alduin killed him."
@sdack: If it pleases you any, it's just as easy to cause the quest to make Esbern and Delphine uneseential and add an optional objective to kill them both, and make the quest conclude upon their deaths.
I guess it's time to put in my 2 cents. I have recently turned my attention onto the main quest and have gotten to the point where the first battle with the World Eater ended in his defeat/retreat. I was completely looking forward to setting up base at Sky Haven temple and begin work on recruiting/rebuilding the Blades, but then Esbern and Delphine ask something of me I couldn't even begin to ponder; and that is to kill the one dragon allied to the human cause Paarthunax before they will have anything else to do with me.
On one hand, I applaud Bethesda's writers for throwing in such a morally gray choice, but in the process of presenting that choice they turned the once fascinating (to me at at least) story and character of the surviving Blades into completely one-dimensional people bent on their own idea of "justice" akin to the character Inspector Javert of Victor Hugo's novel
Les Misérables who only concerned himself with the law and his idea of justice and payed no heed to the kind and good person the protagonist Jean Valjean has become only that he need to be brought to justice for crimes long past no matter what the cost or consequence.
Granted, the Blades may have a point and Paarthunax crimes against other living races, regardless of whether or not they are long past and regardless of whether his actions have actually saved the world and human/mer/beast-man kind: There may be a point where he would be considered irredeemable, like an alternate universe Hitler having a change of heart and instead of killing himself and attempting to spend the rest of his life trying to serve the same humanity he has so utterly wronged. There are going to be people who are never going to let their need for justice and vengeance slide.
The problem is that Esbern and Delphine do not leave the topic open to discussion, it either you kill Paarthunax or they will never deal with you again, while Paarthunax acknowledges the Blades desire to kill him and does not blame them for wanting to do so. Do I want to align myself with people so blinded with justice that they refuse to serve the greater good until that so call justice is served or do I wait and see like the Graybeards suggest until the best course of action reveals itself? Personally I choose the latter (though I may try out the former on a completely different playthrough).
What I really want to do is arrange a duel between one of the Blades and Paarthunax and the victor will decide the ultimate fate of the Blades and whose loyalty the Dohvakiin will ultimately align with. Now granted this is probably death to whatever Blade decides to go head to head with Paarthunax, so we build up the Blades, train one who is able to shout and teach that one the Dragonrend shout to make an even match.
Until that time, Delphine, Esbern, the newly recruited Blade recruits and Paarthunax and the Graybeards must unite under the Dohvakiin, to bring peace to the world and stand together in that cause to fight all those who threaten that peace.
Too bad no such option exists, aside from potential PC mods... =/