This is an interesting topic. Regarding what Rob said:
Arneson and Megarry had brought those two games, 1972, to showcase to us: The First RPG game we experienced via Blackmoor and then, the same night, what would be renamed the Dungeon (board game). This catapulted TSR forward when D&D was released, and the rest of the Minnesota crowd, as Dave noted, followed suit. Now, Arneson was actually hired as "Research Director [...]"
I collected a photo of Arneson's business card a while ago, and Rob is indeed correct:
When I quit as Shipping Manager (but not as Convention Chairman, I did Winter Fantasy 1 as my last after 2 stints with GENCON), Ernie Gygax was brought on board to handle shipping, but when my brother quit, Ernie was moved to Dungeon Hobby Shop mngr and Dave Arneson became the shipping clerk. When he quit it was out of disgust for never having been allowed near design since his arrival.
An interesting question is why someone hired as the Research Director became a shipping clerk. Clearly this was not his own decision; someone must have assigned him that role.
I ask because the typical understanding was that Arneson was given that supplement to design, and turned in
"a bushel basket of scrap papers" that went through two editors (Brian Blume and Tim Kask) before it reached a state fit for publication.
Kask discussed the bushel basket
here. Kask noted that "I did have to empty the basket that day because Gary’s wife needed it for laundry," which tells us that it was not Arneson who delivered his work in a bushel basket, but probably Gygax, who apparently had put Arneson's work in his wife's laundry basket.
In terms of the contents, Kask said that there were "about 50 odd sheets of mostly handwritten material and charts," which seems commensurate with the number of pages of the final product, which actually has less than 50 pages of text--on half-sized pages (5.25" x 8.5")-- once the artwork is subtracted out. So it appears that Arneson did deliver enough material to produce a supplement-sized booklet.
Now, in terms of whether or not what Arneson submitted was "fit for publication," that is hard to say at this point. Kask noted that it was "mostly handwritten," but that shouldn't have detracted from the content itself; this was the 70's, and an author submitting something in handwriting was not unheard-of. Kask said that he "threw most of the crap away, determined to start over and do it my way," and in an article
here, Kask said that "what came out was about 60% my work, 30% Dave Arneson’s and the remainder came from Gary and Rob Kuntz." So it appears that Kask was at least somewhat interested in a design role at the time, rather than just an editing role. Kask also talked about "what has been perceived as a personal animus that I have for Dave Arneson"
here. Given that context, its hard to be sure that what Arneson submitted truly was "crap."