Drain said:
I think that the problem with LOTR lies in motivations of the characters. Sauron/Saruman want teh power, Fellowship members are doing the quest because they are teh good, only Denethor II, the last Ruling Steward of Gondor, is more ambiguous (a good, but ambitious ruler driven desperate and insane after trying to spy on Sauron). This probably has to do with Tolkien's intention to create a mythological work rather than a fantasy novel, which requires different approach to characters.
Saruman is coming from the same place as Denethor: they both believed 'the cause' against Sauron was doomed to fail. They were the two most immersed in their opponent's 'world', and in attempting to engage with him on an individual level they were crushed by a will far stronger and subtler than their own. Denethor was driven into madness and despair, taking the only real threat to Sauron's borders off the gameboard. Saruman threw in, not just for power I think, but out of fear, it was a question of how to survive (I think he was being perfectly frank in his plea to Gandalf to join up with him in this). Saruman is a coward, his treachery and the betrayal of his former allies in 'The West' and his new 'ally' in Sauron is a demonstration of this (hoping to have both sides break themselves against each other, as opposed to truly asserting himself as an independent power). Cowardice was the reason he defected; not necessarily out of lust for power, just fear and 'discerning the sign of the times'. Denethor, though of a lesser nature, was the stronger of the two. Denethor's defection would have meant the end of the war. It's a testament to his character that he didn't throw in with the cause whose victory he saw as inevitable. (he and his sons are my favorite people in the book).
While Sauron wants Order above all and he wants to be the Organizer, he's not entirely about 'power' either. The war is really the only path he believed was open, as he couldn't wrap his mind around the concept of mercy. Sauron gave none, and thus believed his 'enemies', including the Divine, would give him none. His failure to win would mean, in his estimation, his annihilation, something unconscionable to anyone. His actions aren't evil as much as they are inevitable.
It might make everything more coherent to view each character's actions not in light of 'good or evil' but in light of the question of 'What will you do when confronted with your own imminent destruction?' All the significant characters in the book answer that question in a slightly different way. I believe this leads to a clearer understanding of personal motivation, rather than imposing an artificial (and unnecessarily reductive) good/evil dichotomy on everyone.
Also, while Tolkien's races may not be good or bad per se, I don't remember any examples of decidedly "good" orcs/trolls/goblins or decidedly "bad" elfs/hobbits/dwarves.
Yes, shades of grey are present in Tolkien's works, but there are very few of them
First, looking for 'decidedly good/bad' examples of character is itself limiting the conclusions of your analysis, as you are still approaching the work as a reductionist.
The orcs we do hear from (as opposed to the faceless horde) are not uniform in their motivations. Some are just along for the ride, some are genuinely malevolent, some serve purely out of fear, not just of their Master, but of their enemies. In this they share Sauron's foremost delusion: that there could be no mercy or peace for them. In their case it's not entirely delusion, given the attitudes of say, individuals like Legolas and Gimli. We only see the 'on-camera' orcs, I'm sure there were defectors out there (there is a conversation between two orcs on this subject), but they would have had to keep a low profile, as an independent orc would have been marked for death by Sauron, citing treason, and by 'the West', citing orcness. And all of this is only true if they are a race as such; morality is not something for puppets.
There's also the character of Gollum, who is a pretty good example of a thoroughly conflicted and depraved, but by no means irredeemable, hobbit. His final decision wasn't inevitable, and his actions were largely not his own, his will was consumed by something much stronger than himself. The same thing happens to Frodo, ultimately consuming his will as well, the difference is that it was removed from the picture shortly after, giving Frodo the second chance that Gollum did not have (Frodo
failed the quest, the victory of the Fellowship was due to chance/providence).
We don't see many elves in Lord of the Rings, so we don't get inside their heads. The exception being Galadriel, who's 'nobility' was not a foregone conclusion, it was something sorely tried. If this is a question of Tolkien's elves in general, and not just of those presented in LotR, then the Silmarillion is filled with elvish treachery, rape, murder, arrogance, etc. They don't 'fall' on a collective level, but there are many, many individuals who sink very, very low.
Distinctions aren't lacking, they're subtle. It's not so much that are too 'few' of them, it just that people tend to reduce what is there, and interpret in terms of an exterior 'good vs evil' worldview. This is just their perception, not reality, which is 'nondual' (as in Tolkien's cosmology).