The attempt to loosen the federation and “air the room” (especially about finances and having truly free elections) was rejected by Milosevic, he wanted everything... which is why he ended up with nothing. Well, it's not completely nothing just yet, Serbia still practically holds half of Bosnia, I guess it was given to them as consolation prize in advance for losing Kosovo. Sounds a little complicated, I'll stop here.
Milosevic had no other option, even if he wasn't megalomaniac that he was, since his career depended on extremists and they wouldn’t be extremists if they were sane enough to make concessions.
There was some public opinion research recently and it turns out that 90% of both Slovenes and Croats don’t miss Yugoslavia at all. I don’t know what’s the percentage in other ex-Yu countries, but I guess Macedonians could miss it, since they had no problems with Greece when they were part of larger country (that had very interesting ties with both blocs).