[Fordim Hedgethistle]

Aren't we missing a rather obvious point...? If Saruman had not fallen and decided to emulate Sauron, then there would have been NO ill-effect of the War felt in the Shire. The lessons that the hobbits learned from that essential episode would have been lost -- in effect, the Quest of the Ringbearer would have been, in this case, an utter waste since his return would have had no impact of any sort on his world; it would have been allowed to run on, uninterrupted and happily oblivious to the dangers which surrounded and threatened it.

Without Saruman the Bad, there would have been no need to fight to reclaim the Shire (so Merry and Pippin's abilities as warriors would have been mere vainglory -- like Boromir -- rather than active principles of defense and self-sacrifice for a beloved homeland -- like Faramir), no need to redeem it (so Sam's hard fought wisdom would have found no ground in which to plant the seed of what he had learned and brought back), no chance for the hobbits to prove that they are worthy of such a paradise as they've been given (Frodo would not have been able to seal their victory over the bad with an act of profound mercy).