The plot ends with Leper going crazy and Phineas dying; that is tragic because two aspiring young men who could have conquered the world didn't. Usually in tragedies, those in highly respected positions fall to the depths of despair because of hasty decisions; which is certainly the case in "A Separate Peace." If you look at Shakespeare's tragedies, many of them kill off the main characters just after they have realized their tragic flaws (mistakes). But Gene and Brinker are alive at the end of the novel grappling with Brinker's father about what being a soldier and a patriot means. The difference between an older generation converses with the new ideas of youth and this is fun and interesting because it's typical of every generation. Even though we lose loved ones, life goes on for those who remain and that means that happiness and sadness will also go on.
Gene says it best with,
"I was ready for the war, now that I no longer had any hatred to contribute to it. My fury was gone, I felt it gone, dried up at the source, withered and lifeless. Phineas had absorbed it and taken it with him, and I was rid of it forever" (203).