Answer by John Diaz:
I'm writing my answer based only on the movie and not the graphic novel. I am separating this into two parts: The surface and the deeper themes.
1. To understand what Watchmen is about, it's best if you transport yourself back to the 80's and ask- What would the US have needed to win the war in Vietnam, and what events would have followed? The Watchmen is a parody of this answer saying, "Only the hand of God (Manhattan) could have ended that war in favor of the US." The results that followed were that President Nixon was never impeached and never voted out of office. This parody shows the cynics view of the Government as only existing to put on a show for the people with no real solutions or loyalties. This is manifested by the creation and dissolving of The Watchmen, a team of crime fighters that people can rally behind. When the rallying stops, these heroes are forced into retirement.
The events that play out in this "who-done-it" action flick show that mankind's distrust and savage power-hungry nature can only be saved by finding a common enemy; ironically again, the hand of God. It is here that both parties of the Cold War agree to save face when shown their mortality.
2. Dr. Manhattan is a man who is turned into a God and is worshipped and respected as so. As he slowly loses his humanity the people choose to blame him for their actions. The Comedian does not consider it his fault for gunning down a pregnant woman, as God should have stopped him. Rorschach felt betrayed by by God for not assisting in the murder of the only people he ever felt a connection to in his lonely world. Jupiter desired to be loved by God. The Government claimed nothing could harm them with God on their side, thus never claiming responsibility or seeking a solution to their dilemma. As Manhattan further embraced this identity, he became an enabler to each person's addiction and ignorance. Ozy was the only who who sought to challenge this power and used his wits to do what no one else dared, thus freeing everyone from their safety net as they would now fear and respect God together.
It's difficult to draw black and white conclusions in this story because the characters show so much complexity. Ozy is easy to point as the villain, but he saved more than anyone else could. As you analyze each piece in this puzzle, the one constant moral question will persist- Do the ends justify the means? The end for Ozy meant sacrificing few inocents for the many to survive. The end for Rorschach was for the truth to be known, though it likely meant the annihilation of the human race in nuclear war. Its easy to have faith in Rorschach's methods, but was it right? The difficulty to answer makes the story worth telling.