Michael Moorcock attacked Tolkein for sounding too much like A A Milne, and while I don't agree with all of Moorcock's critique, I do see his point. The problem I have here is that LOTR isn't really about the real world in the way that, say, 1984 is (ok, there's a few parallels, but it's pretty tenuous), nor is it an attempt to create amazing new prose or talk about "great issues". For all its achievements, it doesn't move literature forward. In a way, by sounding like a turn-of-the-century novelist in parts and a translation of Mallory in others, Tolkein just looks back and away.
In terms of prose, and only of prose, LOTR is an excellent pastiche. This probably makes me sound like a terrible intellectual snob, but if the question is whether a Nobel prize requires something more than that, then I'd say yes, it does.
For me, LOTR is a little like Gormenghast. Gormenghast is better written, while LOTR has a more comprehensive background/world-building. But both are peculiar, off-on-a-tangent entertainments, brilliant in their own ways. Ultimately I wouldn't give a Nobel prize for that. (To counter the argument about creating a mythology for Britain, I always thought Britain had plenty of mythology anyhow).
However, I would say the same about plenty of writers critics rave about. "Literature" is full of artificial, stilted prose far more awkward and unreal than Tolkein's, even among up-to-the-minute, hard-hitting novels. Cormac "Verily I wish I'd written the King James Bible" McCarthy, I'm looking at you!