Why is this movie so hard for people to understand?
It's not THAT complicated, if a little indirect.
Sebastian isn't just gay, that's only part of why his story is so "scandalous": he's also a sadist (turtles on the beach) and a pervert (or pedophile, as the implication is that he sexually exploits teens and pre-teens). Sebastian lures these starving boys under duress, with the promise of money (he throws money at them outside the bath houses). A lot of this is implied through of the artistry of the film and because of the era it was made. You could argue that the boys don't look young and that there was nothing sinister about these escapades, but the film implies that there was. Sebastian clearly has a dark side, he exploits poverty-stricken boys and Catherine, whom they are initially attracted to.
At the restaurant, Sebastian is made uncomfortable by the boys begging and trying to entertain him with music. He knows they recognize him, his secret life is made more obvious, or perhaps he feels guilty. They attack him, probably initially looking for food, and probably because of what he's done to them, they kill him. They eat him because they are so hungry for food. Cannibalism in impoverished societies is not that uncommon throughout history, and evidence suggests it may even be going on today in North Korea. Catherine isn't crazy, she's traumatized by the unspeakable act she's witnessed...people don't believe something so awful could happen, so they don't believe her. Her aunt is in denial because she wants to preserve Sebastian's legacy and she doesn't want to see that Sebastian had rejected her and was just using her too.
Sebastian is literally devoured by the people whom he devoured sexually (you could argue he devoured their innocence). This is the theme of the story: turtles being devoured, the Venus Fly Trap. The story is great because it presents a taboo subject in a completely unexpected way, with a twist ending.