Peter Jackson has consistently understood the need for sad endings. With only a few films under his belt, the best of them finish on tragedy:
The Lord of the Rings: The Grey Havens. The best ending to the best story ever told is about more than hobbits crying over the fact that they’ll never see Frodo again. It points to Frodo’s death, the fading of the elves, and the inevitable decline of men in the new age. Sauron may have been defeated, but the end of the Third Age is about everyone’s defeat.
King Kong: The Empire State Building. After cartoonish action sequences on Skull Island (worthy of Spielberg), Jackson got the Manhattan part of the story right with heartbreaking silent-film sequences between Ann Darrow and the beast, and the slaying of Kong. It’s the only way the story could have ended.
Heavenly Creatures: Killing Mom. This is based on the true story of two girlfriends who saw the need to kill one of their mothers (which they did) in order to stay together (which they didn’t). It’s one of the best teen love stories out there, tapping into the girls’ gifted imaginations, made all the more poignant by the horrific murder at the end.
This isn’t to imply that happy endings never work. Shawshank Redemption offers a good one without selling out. So does Blue Velvet — here the happy ending is almost demanded by an otherwise excessively dark story. The irreverent South Park: The Movie has a miraculously happy ending which is perfect (though comedy doesn’t really count here). But the best stories are tragic, and if done right, all the more uplifting for it.