I am having issues with the people I purchased the pug from. Pugs, being a brachycephalic breed, tend to have problems with elongated soft palate, as well as stenoic nares. If it simply required shaving the palate, very little trauma should be involved. However, your dog's coughing, gasping, etc., leads me to believe that this was not a minor elongation. As such a dog would never have out grown this condition.
Surgery is always a risky proposition.
Each dog is unique in its response to anesthesia. With your vet having examined your dog and recommending the surgery, following his advice was probably your safest route. Had you not done surgery, the stress that elongated soft palate puts on a Pug, would have possibly caused your dog to die young. I know that its little consolation having lost your puppy anyhow, but feel assured that you were trying to give him the best possible care you could. He has a 4 cm cyst on his left kidney, has been peeing blood on and off for 3 or 4 months.