Tons of options there. Zetsu could've pulled out before the full collapse. Madara could've just revived him with his Rinnegan. Also, this is a story where people have magical healing powers, after all.
Now, why would Madara bother? He was getting old, nearing his death, and in need of an apprentice? A Uchiha that awakened his Sharingan immediately into the two-tomoe state? Not a bad choice.
Even the people at the Naruto Wiki are spazzing out: http://naruto.wikia.com/wiki/Talk:Obito_Uchiha