How does The Handmaid's Tale transform the notion of "utopia"?

One could argue that the Republic of Gilead, the setting of The Handmaid's Tale, is indeed a utopia of sorts. But that all depends on whom you ask. It's certainly not a utopia for the women who live there. This repressive, theocratic society exists solely for the benefit of the men who run it. In that sense, Gilead is a utopia for those men who want to treat women like chattel, as pieces of property to be willfully used and abused by them whenever they feel like it.
The problem with this interpretation, however, is that a utopian society is supposed to be one where everyone leads a happy, fulfilling life, and clearly that isn't the case here. Gilead's ruling patriarchs would counter that their Republic is indeed one where everyone can be happy—but only if everyone adheres strictly to the letter of the law. In other words, if Gilead is less than utopian, they would argue, it's down to the immorality of those women who choose to defy the law. For the women of Gilead, this would be a grossly distorted view of reality. They don't live in a utopia, or anything like one. In fact, they live in a dystopia, which can be defined as a place in which everything is bad.