I agree with you that he's not happy, but I don't see that as a tragedy, so much as a natural movement in life for people who don't find an internal purpose to keep them going.
In terms of Frank's talent, we see the excerpt from "Musical Husbands", we see the cabaret act, and we hear about their plans for "Take a Left", none of which are really that great. Charlie is convinced that "Take a Left" will be brilliant, but nothing in his description of the show supports that, and Charlie in general is a bad judge of people's talent and character. Based on what we see, Frank achieved the full extent of what he had to give, and he's accepted that. And while he's not much of human being, in terms of being a good husband or father or friend, nothing in the show tells us that he ever had the potential to be those things. What the show presents us with is some post-college friends who get a bit punch drunk on their future potential without having a strong basis for that self-belief, who inevitably find real life disappointing. That's true and sad, but it's not really tragic.