Good ending, right? Except, here's what the characters say, right before we learn what's really happening:
Cox: "Aren't you gonna take some pictures?"
JD: "Pictures of what?"
Cox: "Y'know. Crying babies covered in chocolate. People singing 'Happy Birthday' to my son who've never even met him before. You know, the whole routine."
JD: "Where do you think we are?"
This dialogue seems to make sense because up to this point, we thought they were headed to a birthday party. Except, Cox didn't think that. Cox knew it was a funeral—that's why he didn't want to go. He said some stuff earlier that we thought was about a birthday for a baby ("as a rule of thumb, I don't attend parties where the guest of honor has no idea what's going on"), but that's such a good line because in retrospect we know he was really talking about Ben's funeral.
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Until the end, we think Ben's alive, but Cox knows he's talking to a dead man, and some their dialogue even hints at this. Call that sight of Ben a hallucination if you want, but it was a hallucination of a seeing a friend's ghost, not a hallucination of seeing a live friend. Certainly, you could write an episode where someone has a mental break and denies his friend's death, imagines he's still alive, and is forced back to reality at the end (the episode we got throws out the words "denial" and "acceptance" at various points), but that's not what's going on here.
All of Cox's actions show someone frustrated over his friend's death and reacting with conscious knowledge. One scene in particular, where he forgives J.D., would be meaningless if he thinks Ben is alive, if he thinks he's forgiving J.D. for a random patient's heart giving out.
We can all agree that the "happy birthday" line ruined the story, which is why this episode, "My Screw-Up" ... got an Emmy nomination for writing? And this is viewers' favorite episode, beaten only by the series finale? Well, okay, this isn't so much a case of ruining the episode as messing with the reveal, which merely mars the episode. And the fumbled reveal is all the more frustrating because the rest of the episode is so strong.