A distressing number of people seem to equate D&D; with Tolkien's world. Nothing against either one, but they don't have all that much to do with each other. AD&D; borrowed a few things from Tolkien, but only a few. Most of its idiosyncracies come from pulp fantasy. The infamous fire-and-forget magic system came from Jack Vance's Dying Earth series, for example, and the rubbery, regenerating troll is borrowed from Poul Anderson(?)'s Three Hearts and Three Lions (which also yielded the Paladin). The Thief class was inspired by Fritz Leiber's Fafhrd and the Grey Mouser books. Etc.
Back to topic, if you do go through with this idea, make sure that either your game is not too much like Middle-Earth or work out a licensing deal with the Tolkien Estate. A game that has hobbits, ents, mithril or balrogs in it will get you a letter from their lawyers. That's why D&D; has halflings, treants, mithral and type VI demons (or balors).
There are some concepts from Tolkien that aren't widely explored - probably because they're too "backgroundish," or they don't translate into game mechanics easily - that I'd like to see someone riff off of: The Miltonesque idea that a Big Evil Being is actually needed to have meaningful free will in a world created by an essentially Good divinity, for example - the only meaningful freedom an all-powerful god can give you is the freedom to disobey it - or the idea of a world sung into existence by music and words, lending an intrinsic "magical" power to both. (Magic in Tolkien is a fundamental part of the nature of the world; men called it "magic" because they didn't realize that, and elves and dwarves, who were tied more closely to the world, were confused by the term "magic" because setting a password on a doorway was no more strange to them than carving the doorway in the first place - it's all shaping the raw material of the world to them.)
This sort of baseline detail requires a great deal of sitting and thinking and writing and resolving, which is another reason I suspect I don't see it much.
Well, this rambled and flew off on tangents, but I hope it was helpful to someone.
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James
dystopia, n.: A utopia, in practice.