LSoH is one of my favorite movies AND stage musicals, so I've thought about the changed ending a lot.
I think Frank Oz misunderstood a lot of what made it work in the play, so a bunch of subtleties that make the bad ending work didn't make it into the film.
The first thing, he actually DID realize after the fact, was there's no comfy buffer of reality with film. In a stage show, everyone Audrey 2 has eaten comes out and gives a bow and sings the finale with the rest of the cast. It's a reminder that don't worry folks, it's all a play. You can't do that in a movie. They're just plain dead.
The second, I'm guessing was an executive decision to make Seymour more likeable, but they made him WAY less culpable in the deaths of the dentist and Mushnik. The dentist, Seymour has an entire musical number where he actively decides to let him die, as opposed to the movie where it happebs too fast for him to really act. With Mushnik, in the musical, Mushnik just asks Seymour to do the right thing and go make a statement to the police, and Seymour actively murders him by tricking him into Twoey's mouth. In the MOVIE, Mushnik holds Seymour at gunpoint, makes it clear that he's only interested in blackmailing Seymour for the plant, then bends his head into the plant of his own accord with no prompting from Seymour.
They made Seymour a LOT less culpable in the movies, abd that made him too likeable, and THAT made the bad ending way too big a retribution in the eyes of the audience.