[Suzerain of Sheol]

That's kind of funny, if you think about it. Almost like LotR is some kind of time-anchor for the innovation of the fantasy genre. If you picked it out of the 1930s/40s and dropped it here, it could still redefine the genre, depending on how fantasy would evolve without Tolkien.

As for the movies as books, I was thinking more just a flat translation from film to paper a la the books for the Star Wars movies. And I just think it would be kind of... surreal to read. Hell, if I could mimic Tolkien's style to any degree, I would consider attempting that, just for how hysterically bad it would probably end up being. :p

As to your last point, I don't think Donaldson would have ended up writing fantasy at all without Tolkien, considering the way he stole from Tolkien and then twisted what he stole into a statement against the state of the genre.

The others, I'm not sure. I think a lot of it would still have been written, but you'd miss out on the whole Tolkien copycat movement in the 80s and 90s. DnD would never have come about, likely, so cut all those books out, you can throw Terry Brooks right out the window, probably Tad Williams, too. Robert Jordan and Terry Brooks likely would still put out fantasy, but it would probably be something different, not the sort of epic-scale, multi-volume world-building they ended up doing.

Then, of course, you probably wouldn't have ended up with the current dark-n-gritty movement, either, without those cliche-fests to rebel against (though... maybe. Hard to plot how much influence Tolkien really had). I think GRRM would still have put out ASoIaF, but it might not have even had the fantasy elements. Without DnD, I don't see Erikson, or Bakker, or Abercrombie even developing their worlds.

So, yeah, if it had worked out that way, I can see Jackson's LotR coming into that market sort of the way Jordan's Wheel of Time ended up hitting the real fantasy genre: working with what was there, but doing it on such a huge, intricate scale that it towered over everything else for quite a while.