I was reminded of the question by this CNN.com article:
When college students take their lives, as apparently happened recently at Cornell University, the instinctual reaction, to mourn publicly and officially, may be the wrong thing to do, psychologists say.
The American Foundation for Suicide Prevention recommends that schools have a "muted response" to suicide, said Ann Haas, director of suicide prevention projects. That's because students already vulnerable to suicide may be attracted to the idea of getting recognition or gratification in death.
"For those students who seem to really be at risk, there's something about those kinds of memorials that really can trigger additional suicide," she said…
Researchers have found that suicide can, in effect, be contagious, creating clusters of people taking their own lives in close proximity within a few months. The people involved may not have had any direct contact, but publicity of the suicide, including through large vigils and assemblies, may result in more suicidal behavior, said Madelyn Gould, professor of psychiatry at Columbia University Medical Center.
"We do feel that some memorials need to take place, but it might be worth trying to develop some suicide prevention activity to honor that person," she said.
Along similar lines, I remember hearing that newspapers have a policy of not explicitly recording ‘suicide’ as a cause of death in their Obituary columns, lest that inspire imitators. [See Student Newspaper Guidelines here.]
These policies confirm the longstanding but controversial Jewish practice of avoiding public honors for people who commit suicide (Rambam, Mishneh Torah, Hilchot Avel 1:11):
המאבד עצמו לדעת אין מתעסקין עמו לכל דבר ואין מתאבלין עליו ואין מספידין אותו, אבל עומדין עליו בשורה ואומרין עליו ברכת אבלים וכל דבר שהוא כבוד לחייםIf a person knowingly destroys himself, we do not involve ourselves with him for anything. We do not mourn for him, we do not eulogize him, but we do form a condolence line and recite the blessing for mourners and perform all other practices which honor the living.
This is a tough practice, and one that I’ve never actually seen implemented; as the Rambam himself wrote there, and as the Aruch haShulchan noted (Yoreh Deah 345:5) seven centuries later, we depend on any possible explanation to conclude that this was not an intentional suicide.
But why have the practice in the first place? Because of the fear outlined by Ann Haas and Madelyn Gould; we don’t want to encourage others to do likewise for the sake of honor.
To return to the main question, this is why people think that we do not bury a suicide victim in a Jewish cemetery. However, neither the Rambam nor the Shulchan Aruch says anything about excluding that person from a Jewish cemetery. Indeed, the Shach to Yoreh Deah 345:1 seems to say that we do bury the person in a Jewish cemetery.
I did know of one case, in Harrisburg, Pennsylvania, in which a woman was alleged to have committed suicide, and she was buried outside of the cemetery gates. Some years later, though, they expanded the cemetery – and so her grave ended up in with those of everyone else.