[Mungo of Bracegirdle]

Now I'm not really sure about this, it's just an idea I had, but there is no real proof that I'm aware of in the text. The Elves have won great renown as being the Firstborn, the first of the Children of Iluvatar to come into being. The only reason the Valar came to Arda was to create it for them, and in so many words, to "serve" them, and later Men. Now, Aule gets this great idea to create the Dwarves. Hey, they'll add some diversity to ME; I'm fine with this (even if some of the Valar aren't). So he goes ahead and does this. Now here comes my speculation. The Elves are a little jealous. They were supposed to be the object of the Valar's affection. Arda was created for them and Men, the real Children of Iluvatar. Yet, now the Valar are concerned with this new race, that are not one of the Children. So they develop a certain sense of "sibling rivalry." The Dwarves, on the other hand, resent the Elves for adopting this snobish opinion of them. This deepset, mainly subconsious feeling, is past down from generation to generation, just as predjudices are past down through the generations in our world. And, thus, after thousands of years, a deepset animosity towards one another is just intensified to the point where they really can't stand to be in the presence of one another.
Meanwhile, Men just say to themselves, "Hey, life's too short to hate these people. Let's just exploit both." So they do, and now our discussion about elf-dwarve wars has turned into a debate about the social structure of ME. To quote movie-Theoden, "How did it come to this?"

Cheers