Allowing old critters to hang around indefinitely and to continue having offspring actually slows down the development of new types. The result would be species with less adaptability. We get all of the benefit we need by having a reasonably long siring/birthing period in a finite lifetime.
I suggest you read the article CoolBeans cited in depth. Biological aging might seem like an evolutionary paradox precisely because "natural selection designs organisms for optimal survival and reproductive success (Darwinian fitness), so why does evolution not prevent aging in the first place?"
Here's a relevant quote:
For centuries, beginning with Aristotle, scientists and philosophers have struggled to resolve this enigma. The Roman poet and philosopher Lucretius, for example, argued in his De Rerum Natura (On the Nature of Things) that aging and death are beneficial because they make room for the next generation (Bailey 1947), a view that persisted among biologists well into the 20th century. The famous 19th century German biologist, August Weissmann, for instance, suggested — similar to Lucretius — that selection might favor the evolution of a death mechanism that ensures species survival by making space for more youthful, reproductively prolific individuals (Weissmann 1891). But this explanation turns out to be wrong. Since the cost of death to individuals likely exceeds the benefit to the group or species, and because long-lived individuals leave more offspring than short-lived individuals (given equivalent reproductive output), selection would not favor such a death mechanism.