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In a sense there already is a "library" of Middle-earth -- it exists here in the RPG section, in the fan-fiction forum, in countless other places across the web where fans have applied fingers to keyboard to create new tales of Middle-earth (all of which are technically in violation of copyright).
I'm merely suggesting that licensing would provide an opportunity for professional writers to try their hand at Middle-earth. It does not necessarily follow that this must be a rigid paint-by-numbers approach.
Tolkien was a genius, no argument there, but he's not the only capable writer ever to have drawn breath. I'm only saying maybe such action would produce worthy new tales of Middle-earth. Maybe. It's possible.
And unless Tolkien's heirs can figure a way to extend their copyright indefinitely, I wager there will be sequels by other writers, though neither you nor I may live to see them. In any case I don't think that works by other hands and minds would diminish the greatness of Tolkien's core works, any more than reams of fan fiction or three flawed movies have.
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