My initial thought on this would be that, even if he had gone, Lorne wouldn't have been any help, because he is not, by any stretch, a fighter. On further consideration, however, we've seen how he can sing a note high enough to bring an opponent to his, her, or it's knees, so he might have been a real asset. From what he said after murdering Lindsey, however, I got the distinct feeling that he had given up on the whole "fight for the right" thing. He just wanted out, away from it all. It just wasn't his world.
Having said that, as to the question of SHOULD HE, not WHY DIDN'T HE go to the alley, my answer would still have to be no. I see Lorne as sort of like the soldier who Leonidas sent away from the final battle in "300." He had the gift of oratory. If the others died in that alley, which is what they expected to do, then someone should be left to tell the world what happened and why. Wes, Gunn, Spike, and Illyria, and Lindsey followed Angel into battle for reasons that they believed were so important that they were worth dying for. That's a story that needed to be told, and Lorne was the only one capable of telling it. He would be the one capable of writing Angel's equivalent of "The Ballad Of The Alamo."
Something like this:
[ame="http://www.youtube.com/watch?v=eL62m5umP4g"]http://www.youtube.com/watch?v=eL62m5umP4g[/ame]