The point of the revenge story was that if Ellie kills Abby in the end due to Abby killing Joel, it just starts another vicious cycle of violence and vengeance. Who's to say Lev wouldn't have hunted Ellie down? But notice during the Final Fight that Ellie, as she's drowning Abby in the shallow water, has another stint of PTSD, as the last moment she spends with Joel flashes before her eyes, causing her to stop. She realizes that even if she does get her revenge, and kills Abby, she's still going to be haunted by Joel's death as well as the things that Joel did to keep Ellie alive. Killing Abby isn't going to change the fact that Joel is dead.
She has a certain human characteristic called EMPATHY, something that this game is seeking to teach to others. Abby's story, it was the player learning to sympathize for her, and understand why she killed Joel the way she did. Joel's death haunts Abby, she can't sleep, she still has literal dreams about her father, which is what she was trying to to put to bed by killing Joel. She's still messed up. Her getting revenge didn't fix anything for her. She got almost nothing out of it. (And that's what would have happened to Ellie had she finished Abby. She would have gone back to Jackson, still feeling empty and unfulfilled despite getting revenge. And she'd likely have nightmares about Joel every night like Abby still does with her father, despite Abby getting revenge.) And in the end, all that killing Joel did for Abby was get all of her friends and the man she loved killed in retaliation. The story is literally telling you "Getting revenge did nothing but ruin this person's life."
Then when you play the Santa Barbara chapter, it's Ellie that is learning to sympathize for Abby. She sees her tied up on a pillar/crucifix, having been visibly tortured, malnourished, possibly raped (the Rattlers gave off a rapey vibe for sure...), she initially realizes, "I can't kill her now... not when she's like this." She lets Abby off the pillar, they aren't hostile toward each other, and Abby gets Lev down. At this point Ellie DEFINITELY sees the parallels between Joel and Ellie in TLOU1 and Abby and Lev in TLOU2. So she shows empathy until her PTSD from Joel's death kicks in, causing her to assault Abby and try and finish her off.
The ending isn't about revenge, or forgiveness, it's about Ellie's realization that nothing will bring Joel back. Nothing will fix her last conversation with Joel where they had an argument. Nothing will fix her not 100% forgiving Joel before he was murdered for what he did in the hospital in Salt Lake City. And nothing will fix that when Joel was murdered, he and Ellie just simply weren't on good terms. I think that is what is tearing Ellie apart more than anything; that she couldn't reconcile with Joel properly before he died.
Hell, by the end of the game, I didn't even want to fight Abby. Before the fight, I almost just wanted Ellie to get on her boat, and drive away as Abby and Lev go in the opposite direction. No words, no fight, nothing. Just a mutual understanding between the two that it was done. That's how attached I grew to Abby, I thought she was badass and her character arc was very similar to Joel's - start as a hardass, no bull**** character with a cold heart, and then becomes a parent/older sister figure to a 14 year old kid. So when I saw Abby (and Lev) looking like that on the Pillars, my jaw dropped. I didn't want to fight her, and I doubt Ellie even wanted to at that point until the PTSD kicked in.
During the Farmhouse chapter after Seattle, Ellie finds a note on the table from Jesse's parents, saying, "There will always be a place here in Jackson for you, Ellie, and JJ." She likely is going to be living with Jesse's parents along with Dina and JJ.
Also, look more closely in the Santa Barbara chapter. When Ellie gets to Santa Barbara, she doesn't have Dina's bracelet on that she had when she was in Seattle. It wasn't in her backpack if you check it, either. Dina still has it. When Ellie returns from Santa Barbara, and is at the farmhouse, she's wearing Dina's bracelet again, and she also doesn't have any of her survival gear or weapons on her, which likely means that this isn't her immediate return from Santa Barbara. She most likely already had returned to Jackson, reconciled with Dina (hence the bracelet) and went to the farmhouse to find her old room and guitar. Notice how Ellie doesn't look for Dina or wonder where she went off to, or why the house was abandoned. I think if Dina was done with Ellie, she would have at least left a note for when Ellie gets back. With no note being there, as well as all these other things, I strongly think that this isn't IMMEDIATELY when Ellie gets back from Santa Barbara. Then when she plays the guitar (poorly), she decides to leave it behind to finally put Joel's memory to rest.
So I believe Ellie returned home to Jackson, reconciled with Dina, and lives with her, JJ, and Jesse's parents. She didn't lose everything, she just lost Joel and the main link between them: the guitar.
I absolutely love this ending. It's so much better than just the typical video game revenge storyline where you kill the antagonist at the end, and everything is awesome and everyone's happy. Ellie isn't a good guy. Just like Joel wasn't a good guy. The difference between them, was that Ellie realized this and stopped, showing empathy toward Abby and letting her and Lev go on their way. It's an internal struggle that I have never seen before in a video game character, hell hardly any movies have tried touching on something like this. I think it's brilliant, and I'm just about to start my New Game + playthrough and see if I can't pick up on some more small details in the story.