When you're waiting to die (because everyone knows that's how this'll end), you have to pass the time somehow, yeah? He passes it wandering down paths not taken - what-ifs, and their likely outcomes.
What if he'd never been vamped, for instance?
Death from consumption, courtesy of mother, or remembering how desperate he was for a shag back then, syphilis.
What if he'd been sired by Angelus instead of Dru?
He wouldn't have lasted a week, or Angelus wouldn't have. The old man never could stand backchat. Death again from whatever form of torture took Angelus's fancy that day, the more painful, the better.
What if he'd fallen in love with one of the Slayers he killed, instead of the one he can't (won't!) kill (and you can't make me, you pathetic, intangible bastard!)?
Well, you're looking at death again, aren't you, because he'd be kidding himself if he thought he was anything more than stakebait to either of them.
What if he'd never come to Sunnydale (never met her, never hurt her, never got a soul)?
Would he still be one half of a pair of evil lovebirds, painting a red swathe through the world, or would Dru have got bored of him anyway and offed him when he wasn't looking?
Second option, he thinks. Probably.
After that, his imagination fails him.
In the end, he decides daydreaming is overrated if all he can conjure for himself that isn't right here, right now, is a futile existence ending in a meaningless death.
Not surprising, though. He's known for a while that he'd rather be alone in this dark basement,
avoiding the teenage hordes chained up for everyone's safety, listening for her footstep on the stair.
Clear in the knowledge that when he dies, it'll matter.
And so will he.