Nah, I think a combination of him running out of ammo in his handgun and him wanting to punish the rest even more by letting them become zombies is what stopped him.
While plausible, there's nothing in the presentation that hints at that, to me.
Anyway the town had supplies and probably more ammo, why would he leave that behind? There were only two 'fighters' with one gun.
Heck, all the townspeople he killed still had weapons, but he didn't strip the bodies either. Why is that? It makes more sense when you take it that he left that woman live on purpose.
His theme now is "kill or be killed" right? Well, with only two guys at his command, is he really going to be able to win on the basis of superior firepower? No. He can have a whole truck full of guns, but there are only three trigger-fingers. He must gain tactical advantage somehow.
He *intended* to leave one person alive to tell the story. That sends the remaining people of Woodbury running to the next leader, the next source of safety, and that's Rick. Now, he's loaded down with a whole bunch of scared non-combatants who are going to be experiencing a notable drop in standard of living. Rick has to feed, care for, protect, and generally ride herd on these people. Rick will have his resources tied up, and have to extend them in ways that they're poorly covered, allowing the Governor to pick away at them. Masterful, really.
