[...]
Oh yes, I agree, but it's up to the company as to whether it's "worth" going down this route, when most "end users" are quite capable or doing this themselves without the constraints of intellectual property breaches.
I've still got my copy of MERP, (and the One Ring, for that matter)... and the Tolkien books for reference.[...]
Sure, for people who already have the material, that's fine, but what about all the new potential customers?
Well, if you are "a potential new customer" then the chances are you can emulate it already, without having to specifically purchase licenced materials to do so. I seem to remember playing my first "Tolkien-based" game using AD&D straight from the White Dwarf (UK Magazine) back in the early 80's (before MERP was released IIRC). If you are keen enough to want to run a game in a "specific setting" that doesn't have existing products for (or you can't afford to buy), then you adapt it for an existing system from existing sources. That's exactly what generic game systems are for.
The "BIG" problem with ANY "Licenced" product, is that the publishers have to pay through the nose to gain and use those rights... and that is what has caused the downfall of many smaller RPG firms in the past. Does it create customer interest? Yes, you've just got to look at the interest for Morpidious's new license: Dune. (They already have Conan and Star Trek) But it's always a big risk. As for ICE and "regaining the rights" to Middle Earth, well, my opinion? It'd be nice but it'd be financial suicide.