To cite Tolkien: Elves were destined to be 'immortal', that is not to die within the unknown limits decreed by the One, which at the most could be until the end of the life of the Earth as a habitable realm. Their death - by any injury to their bodies so severe that it could not be healed - and the disembodiment of their spirits was an 'unnatural' and grievous matter. It was therefore the duty of the Valar, by command of the One, to restore them to incarnate life, if they desired it. But this 'restoration' could be delayed by Manwe, if the fea while alive had done evil deeds and refused to repent of them, or still harboured any malice against any other person among the living. [0]
Of course, most of the reincarnated Elves probably stayed in Aman, so they had little influence on the development of Middle-earth. But that is not a bad consequence of getting killed in a war.
[0] https://www.reddit.com/r/tolkienfans/comments/90vqkq/why_exa...
Presumably because the loss of a 1000 year old friend hurts a lot.