I think that Middle Earth provides an interesting enough setting that you could have dozens of interesting stories (even during the time of the book) with the opportunity for personal triumph or disaster.
There's an entire military campaign happening in the north which doesn't make it into LOTR at all (outside of vague references in the appendices). That's where I've always wanted to set an RPG campaign.
Other ME campaigns I've imagined include "The Cults of the Blue Wizards" (as alluded to elsewhere in the thread) and "The Other Fellowship" (in which we remove Gollum, generate a party of PCs, and then create a back-story in which the Ring comes into their possession -- immediately establishing that there is no canon and then seeing what happens).
For me, Middle Earth is a boring setting, because it is cosmologically simplistic.
Theres Sauron and co.
And theres the Good Guys.
And thats it.
Um... What?
Even if we ignore
The Hobbit and
The Silmarillion, LOTR's factions are rather more complicated than that.
That part of his post pinged pretty high on my Sarcasm Meter. I really doubt he was being serious there.
The article appears to be a transcript. I suspect quite a few things that people are getting outraged about were probably delivered in a light-hearted manner.
I think the idea that Gary substantially derived D&D from Tolkien is a popular assumption that doesn't stand up to scrutiny. You could argue that he downplayed Tolkien's role somewhat, but dismissing his accounts as lies or delusions is outrageous.
Two points:
(1) The original rulebooks are heavily inundated with Tolkien's creations.
(2) Every play report I've heard from people who gamed at Arneson's and Gygax's tables is
also inundated with Tolkien's creations.
Gygax's claims in Dragon #95 that the Tolkien influences are both "minimal" and nothing more than a "superficial" marketing attempting is, frankly, an absurd attempt to revise the known history of the game. And the core of his argument (that you can't recreate Tolkien's works by playin D&D out-of-the-box and, therefore, there is no Tolkien influence on the game) is just painfully insulting.
I also find the entire editorial distasteful for its hypocrisy. He starts by voicing outrage at those who would assert Tolkien's influence on D&D without asking him about it, and then goes on to attack LOTR as an allegory of World War II (which Tolkien had frequently denied). You can either be outraged when people assume things about a work that the creator denies or you can make assumptions about a work that the creator has denied... You don't get to do both without looking like a hypocritical idiot.
Is D&D's fantasy milieu the result of "kitchen sinking" vast swaths of fantasy literature? Of course. Does Tolkien make up a rather considerable portion of that kitchen sink? Absolutely.