I would like to draw a very distinct line between a bad ending, and a game over. I have absolutely nothing against the idea of a game ending prematurely, nor with it ending on a ‘bad’ note. As long as it is a well thought out ending that you get, and not just some game over screen.
It’s a matter of “Your stats were too low, so you died” versus you “You should have killed or pacified character xyz when you had the chance”. I think the latter can be a story in its own right. If you can look back on your adventure and see where and how you went wrong, well, let me say only that tragedy is a genre and not every good story has a happy ending!
If the loss is my loss, and it’s had as much care and thought gone into it as the “true” ending(s), then I personally think it’s an experience I am likely to enjoy. Honestly, if I ever get around to finishing something, I wouldn’t be surprised if the “true” ending for that had sad undertones. For me it often makes it a lot more real.