Yeah, remember Tony was going to Bump Paulie up, Paulie told him no. That's the last we see of Paulie.
They always had a love hate relationship and Paulie was always one of the best at playing the game that is that life. He saw his shot and took it. Him and Johnny Sac tried to do that as well so his loyalty was always questionable at best
If people really watch, the ending is not awful. It was well done.