Well, consider some unlucky fellow without any significant family ties, without friends and without a job, living off government welfare. His death wouldn't generate much negative externalities, in fact, the externalities would be mostly positive, since he would stop receiving welfare.
Assume that you can compare personal utilities and it turns out that this guy has below-average utility. Would it be moral to kill him? Average utilitarianism says yes.
I suppose that the moral intuitions of most, though not all, people would be against killing him, at least not in a obvious way (some might be in favour of taking his welfare away and letting him starve to death, though, but I doubt that these kind of people use an utilitarian type of moral reasoning).
Would it be moral to kill him? Average utilitarianism says yes.
So would total utilitarianism, if his resources were reallocated to other people of more efficient happiness levels (or to new individuals brought into the world).
Consider the following facts:
This sounds a lot like the mere addition paradox, illustrated by the following diagram:
This is seems to lead directly to the repugnant conclusion - that there is a huge population of people who's lives are barely worth living, but that this outcome is better because of the large number of them (in practice this conclusion may have a little less bite than feared, at least for non-total utilitarians).
But that conclusion doesn't follow at all! Consider the following aggregation formula, where au is the average utility of the population and n is the total number of people in the population:
au(1-(1/2)n)
This obeys the two properties above, and yet does not lead to a repugnant conclusion. How so? Well, property 2 is immediate - since only the average utility appears, the reallocating utility in a more egalitarian way does not decrease the aggregation. For property 1, define f(n)=1-(1/2)n. This function f is strictly increasing, so if we add more members of the population, the product goes up - this allows us to diminish the average utility slightly (by decreasing the utility of the people we've added, say), and still end up with a higher aggregation.
How do we know that there is no repugnant conclusion? Well, f(n) is bounded above by 1. So let au and n be the average utility and size of a given population, and au' and n' those of a population better than this one. Hence au(f(n)) < au'(f(n')) < au'. So the average utility can never sink below au(f(n)): the average utility is bounded.
So some weaker versions of the mere addition argument do not imply the repugnant conclusion.