"What dost thou know of suffering and oppression? I and my people know, but not thou." The reign of Edward VI was a singularly merciful one for those harsh times. Now that we are taking leave of him let us try to keep this in our minds, to his credit. (34.12)
The ending of The Prince and the Pauper is a giant step back. While we have been very close to the characters in the novel, and followed all of their adventures as if we were right there with them, the narrator reminds us that this is just a story. It's kind of like the scene at the end of the movie that pans back and has a voiceover telling us how everything ended.
We don't get to see Edward's death or even his reign; the narrator just summarizes everything for us. While it does feel a little cold to be suddenly so far away from characters we have grown to know and love, it does help create a sort of emotional closure for the novel. It's like the fade to black at the end of the movie.
But even as Twain is tying up the loose ends of the story, he reemphasizes the importance of mercy. We are reminded that Edward has gone through a lot of suffering and oppression in his journey, and it's something that has changed him forever. He'll never forget it, and it's made him a better ruler. What else could we ask for? It's a perfectly happy ending.