The context you might not be aware of is in another thread where he recently stated that "establishing shots" or game time spent on establishing setting detail external to the characters is something he would never do in an rpg, and that it's inappropriate for a DM to allow any circumstances that there characters are not aware of affect their actions because it is "interposing a secret backstory".
I have never asserted that playing with secret backstory as a major component of resolution is inappropriate. I have asserted that it is inconsistent with certain playstyles, including those which I personally prefer.
This is completely orthogonal to whether or not a game can be used to play LotR. Far and away the most Tolkien-esque versions of Elves, Dwarve and Orcs in any fantasy RPG are to be found in Luke Crane's Burning Wheel, which is a game which is expressly designed to be played with no secret backstory component to the determination of success of declared actions.
Of course, most of the LotR trilogy is devoted to focusing on things that the ostensible main characters are not aware of and have no direct relationship with, and is about a world and a story that is bigger than any one character's perspective.
It's not true that most of LotR is devoted to things that neither Frodo nor Aragorn are aware of. Some is, but it almost all involves the other hobbits, either Merry with the Rohirrim, Pippin with the Palantir and then in Gondor, and Sam in Cirith Ungol. Which is only to say that they are also significant characters in the story.
As for LotR as world-building, Tolkien was obviously a clever philologist and literary theorist but his book shows no attempt at all to create serious history or sociology. The "histories" he constructs to support his invented languages have nothing in common with actual human history or social transformation. They (delibarely) echo received literary tropes for mythical and fictional histories. They have the same relationship to real history and sociology as the claim in some Arthurian stories that Arthur conquered Rome (ie none).
I thus regard Tolkien as a key model for the role of "the milieu" in fantasy RPGing: it is a source of theme and colour, stipulated in accordance with desired genre tropes, but not itself a source of genre-independent
constraint. For instance, to work out the dynamics of the relationship between Wormtongue, Theoden, Eomer and Saruman one does not and cannot turn to works on political sociology or the theory of power. One turns to literary examples of treacherous advisers, weak and failed kings, sons in pursuit of redemption, and Faustian wizards corrupted by the pursuit of power. And I personally prefer fantasy RPGs where the same holds true: that is, where the players can safely reason in accordance with genre tropes rather than imposed (but generally radically underdeveloped) notions of "realism".
My point is that modern fantasy fiction does not exhibit the kind of "protagonism" that pemerton likes to talk about.
Well, it wouldn't. "Protagonism" is something enjoyed by the players of an RPG. But fantasy fiction exhibits protagonists (ie principal characters). Who would deny that Frodo, Aragorn and to a lesser extent the other hobbits are the protagonists of LotR? That Conan is the protagonists of REH's stories? That Ged and Tenar are the protagonists of the Earthsea stories?