I don't think is so much that it is bad news, as it is that it represents a time of uncertainty. We like things to be predictable. It's predictable that the Pope will die. It's much harder to predict what he successor will be like, and what effect that will have on the role of the Church in the world.
It is my understanding that the Pope refused to be taken to the hospital for treatment, not wishing to undergo extreme measures to keep him alive. This is in keeping with Catholic views on the sanctity of life, especially since he was able to make the request on his own. It is acceptable to refuse treatment. It is not acceptable, once treatment has been given, to "pull the plug". It is also not acceptable to refuse to provide necessary treatment from a person who is not able to, by themselves or through their appointed representative, has not requested that such treatments be refused.
The Catholic church has established very clear guidelines on this, and I'm certain the Pope will follow those guidelines himself (particularly since he established many of them himself).
Quod scripsi, scripsi.