Me I much prefer a story with a happy ending. I'll take As You Like It over Hamlet any day of the week.
I have always preferred children's books, into adult life, and a considerable part of the reason is that they (together with the best heroic fantasy) have a moral clarity. Good and evil, while often complex, can be differentiated, and good wins in the end. Actually, I think this is, in the end, true to life. In the end, evil fails on its own terms.
I knew Harry Potter 7 would come out right - because I trusted that JK Rowling would not have forgotten her target demographic demands closure and a morally satisfactory outcome.
But mounting a campaign http://www.eveningnews24.co.uk/content/News/story.aspx?brand=ENOnline&category=News&tBrand=enonline&tCategory=news&itemid=NOED04%20Oct%202007%2011%3A05%3A44%3A830 against unhappy endings? I really don't think that's necessary. Make it clear to children that the endings aren't happy (or even make it clear it's not a very good book - at least, I hated the first and haven't bothered with any more) but BURNING BAD BOOKS? wtf?