Unfortunately, Shivans Fall Everyone Dies makes for poor game at best. FS3 would never have gone there.
It could have worked, as long as the illusion of hope existed until the last possible minute. It'd be something more akin to, "
Rocks Shivans fall; make a reflex save to evade. That didn't work so well.... Make a fortitude save to resist the crushing weight of the
rocks Shivans. ... It's a gruesome death."
Volition did more or less that in FreeSpace 2. Think of how much back-pedalling they did with regards to their objectives. "Ravana? Pfft. We'll bend that over and do horrible things to it! The nebula and everything beyond is ours!" Then that became, "Sathanas? Mayhap we should consider leaving well enough alone and let the Shivans keep the nebula [and everything beyond]." Then
that became, "A Sathanas
fleet?! Oh, Mister Shivan, you're welcome to have Gamma Draconis! And Capella too! If you add a side of Epsilon Pegasai, you can make it a combo meal. No? Just the Gamma Draconis and Capella, then? Right, your total is naught, because you're just going to take it all anyway."
As long as there's some hope of stopping the Shivans, the player has something to work towards, even if the end of the campaign is ultimate destruction. If that's the direction that FS3 was going to follow, having a protracted period of stalemate (a bit of back-and-forth here and there, but no real breakthroughs for either side) would set the mood of enduring a costly, but winnable war. Then the Shivans would build their forces in Allied space slowly, rather like they revealed themselves slowly in the nebula theater in FS2, gradually overwhelming the GTVA. During this phase, it would appear that hitting a sensitive target or a Shivan flagship, combined with consolidating defensive forces could stop the advance or even turn the tide altogether. Only in the final act would everything go completely to pot, and even then, an effort to escape the conquering Shivans could leave the player a hope of survival, until the final mission.
That's basically the same structure as FreeSpace 2, and I doubt you'll find a lot of people around here willing to call that particular game "poor at best." The only difference is that the breadth of the front is wider and the scale of the destruction larger.
Not all games have to have a happy ending, and really, the way the FreeSpace series has developed, an ultimate victory over the Shivans would feel completely out-of-place, especially now that we know that the first two games focused on the shivan equivilant of a heavy scouting group and a road works crew, respectively.