Elvis was not eligible for a military honours funeral.
These are reserved for anyone who dies on active duty, honourably discharged veterans, and military retirees. Elvis did not fit any of these categories.
See also http://en.wikipedia.org/wiki/Military_funeral
If every soldier who ever served was given a military funeral, there'd be no soldiers left to actually be in the military every day. They'd be too busy firing off guns at the services.