Should we put our puppy down...?

You should really do all you can do to expose the people you got this poor pup from, no matter what ends up happening in your situation it is important that their 'business' gets exposed and no other dogs have to go through this, chances are every dog they have is going to have worms and staff infection, it's important that someone loving takes them in and nurtures them back to health but its so uncomfortable for them that it would be cruel to allow the place you got them from to continue.