Perhaps the myco infection was severe or left untreated such that the animal probably wouldn't recover.. Some people also euthanize to avoid transmission of disease, but with myco that isn't really an issue.
I keep snakes, I have 11, and I feed f/t rodents to mine. I would not consider feeding live unless that was the ONLY option to get the snake to eat. Feeding live is dangerous for the snake and unnecessarily stressful on the rat. Euthanizing with CO2 (when done correctly) is a lot less stressful and a more humane way to go IMO.
I have had to euthanize some of my rats due to illness (severe tumors, stroke-inflcted damage, MC in a recently weaned pup I got from a breeder, and my most recent case was a male that was fine in the morning and when I got home from work could not walk, could barely move his head and showed no interest in water or food.. After 24 hrs. of no improvement I euthanized him as well. In all these cases I used CO2 which is more humane than some methods vets have been known to use on rats. And even though they had to be euthanized anyway, I would never use a sick animal as a feeder...
The only situation I could see using one of my pet rats as a feeder would be if they died of old age and had no known issues at the time.. Then I could see using them for food, but they would be dead beforehand.
Most snake people that I know (who breed their own feeders) will treat their colony if it has animals with lice, mites, myco, or something easily treatable / curable. If an individual animal is very sickly (i.e. extreme breathing issues, etc.) or has extreme behavioral issues (biting, etc.), then they euthanize it and use as a feeder. Most people that I'm in touch with frown upon live feeding because of the unnecessary risks involved and the easy availability and affordability of f/t rodents.