I think you have put your finger on it Show. The majority of Fantasy and Action fans don't like Tragedy (I should know, as I often share those sentiments myself

). Whereas, for some reason, Romance and Realism fans seem drawn to Romantic Tragedies.
The exception for me is Pan's Labyrinth--I can only handle the Tragic Aspect because I believe the Fantasy element is more real than the Realist element; in which case the little girl doesn't actually die but returns to her rightful realm

. Still, awfully sad though. I cried my eyes out in that film (I am kind of a sap for "Weepies" though). And Sophie's Choice, I wil never ever watch that again, and I wish I had never seen it. It was just too painful.
One has to be really careful to strike the right tone in film. Too strong of a Tragedy can undermine the whole film. There is just enough Tragedy at the beginning of X-Men to charge the film with emotional resonance (similar to the scene in Sophie's Choice), but it was balanced much better by the Fantastic elements.
Finally, as much as I love every Matrix movie (and Animations), I agree: the second death scene of Trinity was Overdone. They should have dialed it back a bit. Still, it's a minor flaw, and not enough to ruin what would have been an otherwise perfect film (imo

).
In conclusion; if the Fantasy elements of The Silmarillion are made the most prominent, it would be possible to pull it off enough for someone like me. But I still think it would be likely to underperform at the box-office. A shame really, because I would love to see it onscreen. But maybe someday it will be done simply for the sake of Art by someone who doesn't care about box-office.
GB