Whew... Let me see if I can post some thought here that actually make sense....
First: I can see the value in drawing the distinction Dale does; and I can understand his classification of Hodgson's tale using that yardstick. I would myself argue that it falls outside the category of science-fiction by dint of the hints that this is not necessarily a natural growth (such hints are quite ambiguous, and can be read either way, if I'm recalling the story correctly, but I do believe they are there); and the fact that there seems to be, at least at one point, an intimation of a moral dimension to what happens to them, placing it outside a strictly secular framework.
(Incidentally, on a strictly unrelated level... Since my first reading of the Lovecraft/Jackson collaboration, "The Green Meadow", it has struck me that there are some surprising parallels or near-parallels between the two; and using the Hodgson as an intertextual reference may help clarify one reading of what, exactly, was happening in that mysterious green meadow. The odd thing is, of course, that Lovecraft wouldn't even hear of Hodgson until nearly 15 years after he and Jackson produced their little piece.)
Now, as to the "indispensable" Lovecraft tales... that one is a hard one to answer, frankly, as, though I do see common themes, motifs, etc., and am fully aware of how he reiterated some of these by expanding and subtilizing them in later tales (e.g.,"Dagon" revisited in "The Call of Cthulhu", or "The Nameless City" revisited in At the Mountains fo Madness), I find that there are elements in the majority of his tales which makes each somewhat unique. For example: "The Tomb" and The Case of Charles Dexter Ward share similarities in theme, and even a handful in plot or motif; yet when it comes to the differences between the two, it is much more than a matter of Ward being more fully developed and layered; there are also elements which "The Tomb" has which Ward does not, and (obviously, given the latter is a novel) vice versa. One of these is Lovecraft's adaptation of the genius loci, combined with his use of the sentience in inanimate nature (something he picked up from Poe's "Usher", though he developed it in his own fashion). We can, of course, read Dudley's statements as metaphor; but there is more than a hint that they are quite literal; that he actually does have such "super-sight" which allows him to see beyond the veil of "obvious empiricism" into a mystical realm resembling certain aspects of pantheism, or even panentheism. This is only one of the differences which makes "The Tomb" unlike its closest relative in Lovecraft's oeuvre.
By the same token, this idea of the sentience in the inanimate recurs in many of Lovecraft's tales, but generally altered or expanded in some way which gives it a quite different feel. One can see this in "The Street" (certainly one of HPL's poorest tales, yet with some points of interest), which introduces the theme of what I have called "the oneirodynia of the inanimate"... something adapted and metamorphosed in quite a different fashion in "The Picture in the House"; and an element which casts quite a different reading on that latter tale than is usually perceived. (The closest he would come to using this same variation on this idea again, in my view, is in the "revision", "Medusa's Coil".)
Add to this the fact that he was constantly experimenting with his various materials, concepts, etc., so that everything we see is, in a sense, part of a larger whole, a work in progress; and it becomes increasingly difficult for me to say that this story is essential, while that one is not; the tales interact with each other, often explaining or clarifying points which otherwise would remain obscure. (The seemingly nonsensical intrusion of references to Kadath in At the Mountains of Madness make perfect sense when one adds in that oneirodynia I mentioned with the idea of an objectively-existing dreamworld which itself seems to be connected to the earth's prehistoric past -- as well as other elements -- and all of this culminates in the idea that what lies behind those other mountains is a primal essence or entity which may define the very nature of reality and its origins... another take on Azathoth, perhaps? Yet such a reading also allows a reflection backward, onto earlier writings, giving them also a quite different reading -- and therefore feeling or impact.)
Lovecraft isn't entirely unique in this (Moorcock has a fair degree of it, too, for instance, as did Cabell), but he may be the most acutely developed instance of it I have so far encountered.
What this boils down to, to me, is that there is no single set of things which are "Lovecraftian" which run throughout even his greatest works, which would make other, admittedly lesser (in the strictly artistic sense) pieces "inessential". They all (or nearly all) work together to produce that unique structure; and removal of any of those supporting members leaves one with a distorted view of what makes Lovecraft's work "Lovecraftian".
