The latest months of varying success for the Sri Lankan military in its battle against the LTTE has resulted in a catastrophic situation for primarily the LTTE and the civilian population i the north but that is not the main reason for why this is a negative development.
The main thinking among people seem to be that defeating the LTTE would eliminate the resistance to Sri Lankan unity. That most probably is not the case. The LTTE is just one organisation expressing ethnical tensions in this region. If that organisation falls (which seems to be on the verge of happening) it will be followed by another organisation of some form and the violence will continue.
There are large amounts of historical evidence from ethnical conflicts around the world to support this. What now will happen is probably that the conflict turns from being relatively limited to one organisation/state against another state in regular warfare to one mostly limited to terrorism and irregular warfare. Most likely this will lead to more civilian casulties and less liberal freedoms for everyone in the region.
It can be argued with the help of Richard Rosecrance’s (et al) theory about he success of self determination struggles in the world (presented in the book; No More States ) in which he argues that they are primarily dependent on the acceptence of global influence (globalisation) by different parts in the struggle and the attitude of global and regional powers. In the case of Sri Lanka, the Sri Lankan government has turned away from global influence, banning reporters, resisting the UN, and wanting to mend to matters their own way, while the LTTE and the Tamil people has used the global arena to their advantage, largely winning the propaganda war. What is left to see is were and how the global and regional powers tend to use their influence or power. Right now more and more pressure seems to be turning on the Sri Lankan government.
It is not unlikely that the result accually could be increased probaility for Tamil self determination because of the development. We will see.
What seems to be clear is that this is in any case not a positive development for anyone, more blood surely will be shed. Restraint from all sides is one thing to hope for.