Dante defeated his foes, and when they didn't simply die they surrendered their souls to him as proof of his conquest. Thats pretty much death in my opinion, what Dante did with the weapons/souls he aquired is a mystery I would imagine he simply set them free.
Restoring the demons to their original states seems very hard to believe in the history of DMC, if Sparda had THAT kind of ressurection ability I would imagine his human love would be ontop of his list to ressurect. Even if they were returned to their original formes when released, what happened in the situation of Alastor and Ifirt? They were just sitting there, waiting to be used.