On the review compilation site Metacritic, Milk earned a perfect 100 score from The Chicago Sun-Times, The New York Times, The New York Post, The Washington Post, The Boston Globe, The San Francisco Chronicle, Rolling Stone, TV Guide, Slate, and Time. It also has the most Oscar buzz. None of this would be happening if Milk had a happy ending. Hollywood has a long history of making movies and honoring films that can be summarized as gay = dead.
Somehow the few big budget movies that do show lgbt people, and those that are considered important each year, tend to fall in the category of Plea for Sympathy. "Gays shouldn't be killed" is a fairly low hurdle to clear, yet it's about as far as Hollywood is willing to go, and each time they do, they're cheered by robust self congratulations.
In the spirit of Vito Russo, look at which stories get told and rewarded, and which don't:
The Children's Hour (1961) lesbian suicide, five Oscar nominations
Silkwood (1983) (probably) bi woman murdered (for other reasons), five Oscar nominations, incl. bi and lesbian roles
The Times of Harvey Milk (1984) gay man murdered, won Best Documentary Oscar
Philadelphia (1994) gay man dies of aids, five Oscar nominations, two wins incl. gay role
As Good As It Gets (1997) gay man bashed, seven Oscar nominations, incl. gay role, two wins
Boys Don't Cry (1999) trans FTM murdered, two Oscar nominations, won Best Actress for FTM role
The Hours (2002) lesbian suicide but also open well adjusted lesbians, nine Oscar nominations incl. Best Actress win for suicide role
Monster (2003) killer lesbian executed, Best Actress Oscar
Brokeback Mountain (2005) gay man murdered, eight Oscar nominations, incl. two gay roles, three wins
Little Miss Sunshine (2006) gay man attempts suicide, four Oscar nominations, two wins
Milk (2008) gay suicide and gay man murdered, Oscar nominations to come
For whatever reason, the rare big studio movies in which the gay characters don't die are ignored by the Oscars, as are the many great indie queer movies that never reach the distribution they deserve. Other than The Hours, the best may be Gods and Monsters from 1998, which was nominated for three Oscars and won best adapted screenplay, and Far From Heaven (2002), which earned four nominations. Maurice, Velvet Goldmine, and Priscilla, Queen of the Desert were each nominated only for costumes; The Birdcage only for art direction; My Best Friend's Wedding only for music.
Transamerica was a great exception in 2005, nominated for two Oscars including the MTF role, but it's an open question whether it would have been so honored if the M had been played by an M rather than an F. That same year, Capote was nominated for five Oscars, but typically it was completely degayed. Truman's lover Jack Dunphy was reduced to something less than a roommate -- a concerned friend -- since they were never shown at home together.
Where are the major Hollywood movies showing healthy, unharmed contemporary same sex couples, and where are their Oscars? Why has The Front Runner languished in development for decades? Patricia Nell Warren says it's because it's set at the Olympics, but now the crowds can easily be CGI. For that matter, where is the biopic of Walt Whitman including his boyfriend Peter Doyle? Whitman's importance to American literature is approximately one thousand times greater than Harvey Milk's place in American politics.
Is it that filmmakers and screenwriters feel it's more important to show injustice against gay people, or are these the only stories studios will greenlight? Executives are certainly more comfortable with the storyline that goes "come out, die" and so is the religious right. The Family Research Council protested Kinsey but they, and Focus on the Family, and Concerned Women of America, all announced they wouldn't picket Brokeback Mountain.
For any Hollywood defenders who want to suggest that "drama is conflict," save your keystrokes. Conflict does not mean annihilation. In mainstream storytelling, an unhappy ending is considered more sophisticated because it is uncommon. Each year hundreds of very common movies conclude with a male and female couple united happily. Those that don't are exalted for subverting convention and playing against the audience's expectations. Obviously, gay stories do not unfold against a wealth of happy endings and viewers have been trained to expect misery.
As for Milk with a happy ending, that movie would be called Noble. Elaine Noble was elected to the Massachusetts State Legislature against all odds from a conservative Irish Catholic district, basically Dan White's people. And she did it three years before Harvey, though Milk ignores her accomplishment and touts him as the first openly gay man elected rather than first gay person. The plot of a scrappy woman triumphing over entrenched unfairness is a Hollywood favorite (Norma Rae, Erin Brokovich) but you won't see this one get made.
And if you haven't yet seen Milk, please pay attention to the scene when Harvey sees the ad designed to fight Prop 6. Not only could you substitute the ads against Prop 8, it's exactly the same as the print ads for Milk. He's outraged, and with good reason.