I'm not sure how Eastwood got so muddled in his presentation of Flags of Our Fathers. The characters are blank slates rather than having depth, the flashbacks show horrible images without creating empathy because we do not identify with the characters, and in these flashbacks it's too dark to tell who's who. In fact they don't even introduce us to characters before we learn they are killed off.
In contrast, the characters of Letters are three dimensional and sympathetic. Had Letters been introduced by itself, it might have garnered more box office receipts and academy nominations. Somehow Flags of Our Father detracted from the more outstanding film, Letters of Iwo Jima.
I would say that "Letters from Iwo Jima" succeeds because it tells a straight forward story. "Flags of our Fathers" jumped around alot and constantly demanded that the viewer refocus their attention on a different part of the story. Iwo Jima focused specifically on the smaller picture. Life with the Japanese troops leading up to and during the invasion. It was also intriguing in its fair handed depiction of the japanese, not unlike the depiction of the Germans in "Downfall" and "Sophie Scholl". These perpsective are new and interesting to alot of people . Flags told two stories. That of the individual soldiers and that of the big picture; America's reaction to the flag raising picture and the subsequent war bond tour. This way of telling the story wasn't necessarily the problem seeing as it was based on the book. However the movie felt unbalanced and it definately would have helped if more time was spent alongside the troops in the battlefield. Big story and limited amount of screentime to get the story across I guess.