Both of you are missing a point to the scene learned later. If you end up watching the next part of the movie. The woman asks the "Man in Black" that he put the poison in his own glass, but it turns out that both glasses were poisoned and the "man in black" had built up a tolerance to it over the years... So, you both were correct that the villian was going to die with the good vs evil atmosphere, but it was the trick of both glasses poisoned which makes the scene interesting.

Also, not to be a spoiler, the Man in Black does die later in the movie....

If you haven't seen "The Princess Bride", stop whatever it is you're doing right now and find a copy and watch it from beginning to end. This is far more important than whatever it is you're occupying yourself with right now.