What was the point in giving Thel the rank of the Arbiter if the prophets are just going to betray him when Thel gets the Icon in halo 2?
The entire point of the Arbiter position was to create an expendable, albeit skilled soldier.
The prophets made it clear that he was supposed to be performing Self Delete missions, and covert ones at that.
He wasn't even supposed to survive his first mission, instead just to weaken/flush out the heretics so the Oracle could be reclaimed.
The position wasn't a reward either. He was sentenced to death for allowing the Halo ring to be destroyed in Halo:CE. Being made Arbiter was just a chance to redeem hisself, but not his life, by performing Self Delete missions in order to aid the Great Journey.
His job in getting the Icon was another Self Delete mission to get past the Flood and Sentinels and reach the library.
He was betrayed then however only because the prophets were allowing the brutes to usurp the position of the elites.
The Arbiter needed to die because he was a religious icon and leader for the elites and would be a good general for them if they were to revolt, as well as because he was learning the truth behind the Great Journey.
A better question is why there are no ally grunts or hunters in Halo 3, despite many of them siding with the elites during the civil war in Halo 2. Even if it was just a minority who revolted in 2, there should still be at least a few in Halo 3 but instead there are only ally elites.