There are two main arguments that might been used to defend Oz's action. One is that he was acting in defence of Willow. It seems to me important to point out that Oz's response would not be justifiable within a legal definition of private defence. The law does permit private citizens to act to defend others in danger from aggressors, but any action must be a response to an attack and not a pre-emption of one. It is not permitted to strike or kill another prior to any attack. Although Veruca had hit Willow earlier and had stated her intention to harm her, Veruca was not making a direct move to harm her any further when Oz attacked and killed her.

I don't of course want to get bogged down in the legalities of the matter. After all, the law, whilst reflective of ethical standards, it is not always reflective of our intuitive judgements on right and wrong. And we can all see that once Veruca turned into the wolf, she was bound to pose a danger to Willow and that Oz's pre-emptive strike was a sensible way of preventing her being harmed.

The other defence might be that Oz was not responsible for his actions, since he killed Veruca in a wolf-state. This seems to me to be negated by the fact that as he made the decision to attack her and at the beginning of the actual attack, he was clearly still human.

Of course it might be said, that while Oz's form was still human, that his judgement was affected by the altered state that precedes the transformation. But I think that the lack of actual aggressive action on Veruca's part before Oz struck and the fact that it was human Oz who initially acted may be a pointer to the fact that the killing can be explained in another way than merely as a defence of Willow.

Oz is and always has been uncomfortable with his "wolfiness." We saw in Fear Itself his terror of losing control, of becoming the wolf when he is un-caged and could hurt another. Veruca challenges Oz's view about his life as the wolf. Her attitude to their wolf-nature is attractive because it would rid him of the concern he has about his dangerous side. She gives into her wolf-nature completely; she feels no concern; no guilt. She even allows herself to roam free as a wolf, regardless of the possible harm to anyone she might attack. Veruca believes that the wolf-nature is their true nature and even feels sorry for ordinary humans because they don't have the same power. Though Oz disagrees with her, he is clearly intrigued by the idea. In Wild at Heart, we see Oz allowing his wolf nature an unaccustomed freedom, as Veruca's idea takes a subtle hold over him. Despite his feelings for Willow, he gives in to his animal attraction for Veruca, seducing/dragging her into the cage with him, when he might have continued to try to reason through their differences or have sought help from Buffy and the Scooby Gang to control her. Instead he gives in to his own wolfiness. Oz is seduced as much by Veruca's ideas as by her body.

Still, Oz resists allowing the wolf a completely free rein, constrained by his need to believe that he is normal, that he is only the wolf three nights a month. Oz has always considered the wolf to be separate from him, more of an affliction than a part of him. He has no memory of his acts when he turns, yet Veruca tells him that he will gradually begin to remember what he does in a wolf-state. Oz wants to be human, yet he wants to let go of his restraint and revel in his wolfiness, as Veruca does. He is in conflict between these two views of his own nature (naturally, Oz being Oz, this conflict does not manifest itself in a tremendously open way. As Willow has said, when it comes to a taciturn man, you have to look to his deeds).

When he discovered Veruca is prepared to kill Willow to secure him as a mate, Oz's internal conflict is resolved, since her savagery is revealed in its true harmful light. He realises where embracing the wolf might lead him and is no doubt horrified that he had ever considered Veruca's ideas. She had tantalised him with a freedom he could never possess, a freedom which had hurt and finally endangered his beloved Willow.

Oz's attack on Veruca was a result of his disillusionment. He attacked her to extinguish the idea she represented, that he is not human and should not try to be so. The fact that she also presented a threat to Willow merely provided an acceptable opportunity for him to express the impulse to eliminate her.

It is in this very act that Oz proves Veruca right. He has the savagery of the wolf within him all the time. This is what leads him to leave at the end of the episode. He must come to terms with a fundamentally different view of his own nature, with the knowledge that he can never consider himself to be human again.