Bakshi’s LotR is a complete failure. The Hobbit Rankin/Bass has charm but the designs of everyone but Bilbo are pretty awful. There just has not been a successful animated Tolkien. His world just doesn’t lend itself successfully to animation IMO.
And I think it’s because there’s a verisimilitude to his fantasy that gets lost when translated to that.
For the longest time, video game adaptations we’re notorious for having a terrible track record and not being any good. There was a reason the term “videogame movie curse“ was coined. Then, in 2017, Castlevania, a Netflix series adaptation of the popular video game franchise, comes out to popular acclaim. 2019, Detective Pikachu. In 2020, Sonic the Hedgehog comes out, and in November 2021, we get Arcane, a very successful animated series adaptation of popular League of Legends characters and lore, and the curse was finally broken. Since then, with a few missteps here or these, there has been banger after banger of good to great videogame adaptations in movies and television, from two Sonic sequels, a second season of Arcane, Fallout (second season now in production and filming), Twisted Metal (with a second season on the way), The Last of Us, Cyberpunk: Edgerunners, and many more on the way and yet to come.
Just because Tolkien’s work hasn’t been adapted successfully thus far doesn’t mean that it can’t or ever won’t be. Just like with video game TV and film adaptations, it’s going to take a bit for the people in the film/animation industry who grew up with things like Lord of the Rings and Harry Potter to finally have a crack at making a successful adaptation.
I would say maybe the only hurdle is animation as a medium being looked down upon as lesser and not seen as a legitimate art form. If video games, for the longest time seen as only something for kids, can overcome that stigma, then, so can animation.