In what sense did Arwen succumb to fear? She didn't try to go to the underdying lands like the Numenorians did. She didn't kill herself like Denethor. In the end, she abided by her choice, though she found it a bitter one. I don't see a tragedy here, not if Aragorn is right about the "gift to men".
That said, the ending is very sad. And I can tell you, when you read these books, you really get into the characters and feel sad when they all go their seperate ways at the end....