I chose option #1, since I’m pretty sure I’m living with a hobbit throwback. He’s in the kitchen right now, frying something that smells lovely.
Humans are at least as evil as Orcs, & a lot smarter.
We wacked em.
And made the toe hair into doileys.
They’re still around. When in public, one hobbit typically hops on another’s shoulders and they wear a trenchcoat and a fedora.
You know somebody had to do it. Almost all of the porn I saw is not conducive to baby making.
My theory is that we Jews are what remains of the hobbits.
We get shorter, hairier and more hobbitish as we age.
We feel compelled to retire to Shirish parts of Florida and live in condos that look like Hobbit Holes.
We deal in mathoms.
We are mortally insulted if we offer a guest food and they turn it down.
Fool of a Took!
Jews are Dwarves. Even the Perfesser admitted it.
I’m open to the possibility that we are Dwarves, but I’m just not seeing it. Let’s see your evidence and hear your arguments.
Do your womenfolk have beards?
Not that I’ve noticed.
I believe there are yet Hobbits in the New Jersey prison system.
Lugers, garrottes, pipe weed, insider trading, that sort of thing.
Let me rephrase that for Wile E: Have you noticed that you have womenfolk at all?
::checks toes::
Yep, they married in. 
I suppose some married in. Mostly they just went went extinct. Perhaps they were eaten by smilodons, but “other” was a better choice. They didn’t adapt to a changing environment, and were out-competed.
They emigrated to Flores and died there.
Skald Minion #53: “About the flaming bee attacks Lord High Poobah…”
Skald the Rhymer: [Adjusting Poobah hat] “What of them?”
Skald Minion #53: “The bees, well… none of your enemies have been destroyed by them. The bees are burning to death the moment they leave the launcher.”
Skald the Rhymer: [Eye twitches, dangerously] “…”
See question 7 and its answer here: http://tolkien.slimy.com/faq/External.html
Further discussion here: The Hobbit, The Lord of the Rings, and Tolkien - The One Ring • View topic - Could the Dwarves be Jewish?
The bees burst into flame only when they sting. I learned from that last debacle with the SuperFriends.