Well, MadEye, my guess would be fear. Remember Harry's talk with Nearly Headless Nick? I know it wasn't entirely satisfying by way of explaining how one becomes a ghost, but really, the reason is all there. Fear of going on beyond life led Nick to choose a shadow of the life he knew. He was afraid to let go of this living world to move into whatever is beyond.
Well, I get the feeling something similar is going on with Tom Riddle. Sure, there is the deep-seated hatred of muggles which he attributes to his lousy father and his Slytherin heritage, but isn't it possible that there is some fear there, too? I mean, there were generations of Slytherin heirs who did not go out to destroy the world in their own image. Is the horrific, driving need to conquer, to defeat everyone and everything a way of avoiding the possibility of rejection and failure? Is the quest for immortality more than just a power trip? Mightn't it be a twisted way of avoiding facing death?
I realize that this begins to make Voldemort sound like a sad little person, but really, isn't every schoolyard bully a sad little person? This one just seems to have grown up to be evil incarnate. 
What I meant by this being a fate worse than death is that if Tom were to succeed and vanquish the "light" side of wizardry, what would he have? Certainly no positive results will come of it. To call it Nihilism is way to simplistic, but that thought did jump into my head. Victory for Voldemort will be empty because to win he must destroy everything. So, his victorious prize is - nothing. Wouldn't that be a pretty miserable fate?
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Have to self-promote just a touch...
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