Hriston
Dungeon Master of Middle-earth (He/him)
A more subtle example - should a truly canoncial Middle Earth game have Hobbits in it?
In the stories, Hobbits are the vehicles for self-insertion into Middle Earth on the part of the reader (hence the Hobbits correspond to an idealised version of JRRT's conception of his readers - a certain group of English people). It's telling that most of Middle Earth is new to them (as it is to the reader), and that they likewise are unknown to most of Middle Earth (except Gandalf, who at times is a quasi-authorial figure).
In a RPG, the participants don't need this sort of vehicle for self-insertion, because they have their PCs. So the Hobbits become redundant, and a distraction.
This is why I think it is not coincidental that Burning Wheel - the elves, dwarves, orcs, trolls, wolves, and spiders of which are very faithfully modelled on JRRT's conception (both in their overt traits, and their thematic elements like elven grief, dwarven greed and orcish hatred) - has no halfling PC race.
I'm curious what @Hriston thinks of this, too.
Well, I don't think it needs to have hobbits in it, if that's what you mean. Hobbits were fairly rare after all, so it wouldn't break with canon for a game to have no hobbits in it, especially if the game is set in a time and/or place where there were no hobbits. But I think for it to be a canonical game, hobbits and the Shire would need to exist off-screen, in their appropriate time and place, even if not present in actual gameplay.