Sorry, I have a more clear cut answer than most here...
Yes, personally I think it is cruel to let a puppy cry at night. They are just coming away from their litter and mum which is all they knew up to then, they are tiny babies in a new environment with new people, smells and noises and they are a sociable species by nature... and we then shut them away at night as soon as we get them. I feel that their anxiety is quite serious and personally I would never let any dog (even less so a new puppy or a new dog) cry through the night.
So what I always do when I get a new puppy or new rescue dog is settle them in my bedroom in a crate. Both my puppies have slept through from day one and I have never had any noise at night, the same applies to the various rescue dogs that I have adopted over the years. If they were whining a little I could just gently assure them, and they settled right back. If they needed to go to toilet, then I'd know about it straight away and could take them out. Win win for both the puppy and the owner.
Once they are fully house trained, I remove the crate. In my case, they can then sleep wherever they like (except my own bed). Most stay in my bedroom on their beds, but my saluki for example tends to sleep in the sitting room or conservatory...
If you want your puppy to sleep somewhere else (ie. downstairs) I would keep him in your bedroom for a few days or weeks until your puppy is well and truly settled and gradually move him in his crate to where you finally want them. This is the least stressful both for you and the puppy.
PS. The same thing is now recommended with babies, to not just let them cry like it was recommended in the old days...