[Legolas]

Right; further points about the movie should be done in that forum.

Really, a majority of the elves left in Middle-earth at the time of the War of the Ring were fighting, as stated before, with Lorien against the forces across Rhovanion. Other than that, there were very few elves left in Middle-earth. The time had come to complete the shift of dominance from elves to men, as Tolkien says, was planned/destined from the beginning ("The entering into Men of the Elven-strain is indeed represented as part of a Divine Plan for the ennoblement of the Human Race, from the beginning destined to replace the Elves"). Truthfully, they should have already been gone (as Tolkien describes in the second quote provided below).

In his Letters (among other places), Tolkien makes some notes about the elves not being perfect or meant to reflect perfection - they too have their weaknesses. They certainly have admirable qualities, such as their love in preserving nature, but there are flaws obvious in looking at the history of Middle-earth. Some are very obvious in the happenings of the First Age, but some are observable in the Third Age though they go often overlooked. These notes can be sort of long, but it's hard to edit them while preserving the entire thought.

The fall of the Elves comes about through the possessive attitude of Feanor and his seven sons to these gems. [...] They pervert the greater pan of their kindred, who rebel against the gods, and depart from paradise, and go to make hopeless war upon the Enemy. The first fruit of their fall is war in Paradise, the slaying of Elves by Elves, and this and their evil oath dogs all their later heroism, generating treacheries and undoing all victories.

In the first we see a sort of second fall or at least 'error' of the Elves. There was nothing wrong essentially in their lingering against counsel, still sadly with the mortal lands of their old heroic deeds. But they wanted to have their cake without eating it. They wanted the peace and bliss and perfect memory of 'The West', and yet to remain on the ordinary earth where their prestige as the highest people, above wild Elves, dwarves, and Men, was greater than at the bottom of the hierarchy of Valinor. They thus became obsessed with 'fading', the mode in which the changes of time (the law of the world under the sun) was perceived by them. They became sad, and their art (shall we say) antiquarian, and their efforts all really a kind of embalming – even though they also retained the old motive of their kind, the adornment of earth, and the healing of its hurts.

Some reviewers have called the whole thing simple-minded, just a plain fight between Good and Evil, with all the good just good, and the bad just bad. Pardonable, perhaps (though at least Boromir has been overlooked) in people in a hurry, and with only a fragment to read, and, of course, without the earlier written but unpublished Elvish histories. But the Elves are not wholly good or in the right. Not so much because they had flirted with Sauron; as because with or without his assistance they were 'embalmers'. They wanted to have their cake and eat it: to live in the mortal historical Middle-earth because they had become fond of it (and perhaps because they there had the advantages of a superior caste), and so tried to stop its change and history, stop its growth, keep it as a pleasaunce, even largely a desert, where they could be 'artists' – and they were overburdened with sadness and nostalgic regret.

...each of which [Men/Elves] has its own natural trend, and weakness. The Elves represent, as it were, the artistic, aesthetic, and purely scientific aspects of the Humane nature raised to a higher level than is actually seen in Men. That is: they have a devoted love of the physical world, and a desire to observe and understand it for its own sake and as 'other' – sc. as a reality derived from God in the same degree as themselves – not as a material for use or as a power-platform. [...] This [immortality] becomes a great burden as the ages lengthen, especially in a world in which there is malice and destruction (I have left out the mythological form which Malice or the Fall of the Angels takes in this fable). Mere change as such is not represented as 'evil': it is the unfolding of the story and to refuse this is of course against the design of God. But the Elvish weakness is in these terms naturally to regret the past, and to become unwilling to face change: as if a man were to hate a very long book still going on, and wished to settle down in a favourite chapter. Hence they fell in a measure to Sauron's deceits: they desired some 'power' over things as they are (which is quite distinct from an), to make their particular will to preservation effective: to arrest change, and keep things always fresh and fair.