The Shire represented the idealized rustic Olde England of Tolkien’s imagination. Of COURSE technology would be primitive there. The hobbits were supposed to be stout English yeoman farmers who worked hard, then enjoyed life’s simple pleasures: a pint, a pipe and a few songs.
I suspect one of the reasons for the lengthy stagnation was that many of the sentient races who controlled things had extremely long life-spans, and were, in fact, very conservative and backwards-looking; they mourned the loss of an idealized past (that some of them had personally lived in!), and so neglected or even actively discouraged building for the future.
Look at the kings of Numenor - they lived longer than ordinary men, but for centuries cared more for their ancestors than for their children - while the stewards that followed them simply tried to preserve things as they were.
The elves were even more conservative, always mourning the passing of this or that amazing thing from the past.
This is true: It’s often said that the publication by which science is advanced is not the peer-reviewed paper, but the obituary. When you’re going a thousand years between obituaries, you’re not going to have much advancement.
Come to think of it, the Hobbits themselves (and their idyllic English lifestyle) are relatively new on the scene. ISTR Treebeard thought they were small orcs because he’d never seen a hobbit before, and they weren’t mentioned in any of their songs.
Oh, they had been around but never in large numbers and never in history. The Rohirrim remembered them from their ancesters days living in the upper vales of the Anduin.
The Hobbits were basically just a short subspecies of humans as were the Woses or Druadains.
The other issue, is that without a population problem, there is little incentive to pursue technology. There was ample water straight from the environment, fairly straightforward agriculture, livestock farming, wild game, and fishing provided food.
Couple that with a lack of a religion, or demand to know the why of existence… there is no need to develop any tech beyond creating shelter, music, and art.
Didn’t Bullroarer Took invent the game of golf? That may not be technology, but it is still an (arguable) advancement.
More seriously, there is the famous Harry Lime speech:
So basically, a peaceful, loving existence is incompatible with technological advancement.
Except that it’s not true, since the ‘too peaceful to invent’ Switzerland has invented things like Velcro, Cellophane, and the World Wide Web, and in the scientific world was the first to discover DNA. People said stuff that wasn’t true long before the Swiss invented the WWW for people to share quotes that aren’t true 
Wasn’t the World Wide Web developed by a Brit?
Yes, and the first thing done by the first user on the World Wide Web was to post a factoid that wasn’t true.
Switzerland as “peaceful” is an even more ludicrous statement. At exactly the same time as the Borgias were winning notoriety in Italy, the Swiss were aggressively expanding their borders and supplying mercenaries to almost everyone. Their reputation on the battlefield, in particular their refusal to ask for or extend quarter, was fearsome.
Well, there is steel in Middle Earth so the level of technology is at least at crucible steel. Maybe Saruman in his haste to grow and arm his orc army came up with a way to mass produce steel which triggers the industrial revolution after the events of LOTR - the “Sharkey Process” instead of the Bessemer process. The hobbits (who have access to the factories Saruman set up in the Shire) come to dominate the steel industry and Hobbiton becomes the Pittsburgh of Middle Earth.
And their uniforms were fabulous.
Man walks down the street in those pants, you know he’s not afraid of anything.
Of course if LotR is supposed to have actually taken place in our past, then sometime after the death of Aragorn the world regressed to the point that people used stone tools again, and it took millennia for bronze to be reinvented.
That’s one glaring flaw in a lot of high fantasy: the tech is practically space-age compared to what actually existed on Earth circa 3000 BCE.
Yep, collasped society and no real artifacts left behind. The assumption does not really work. But it was a style at the time to discover lost diaries and histories. Tolkien was an author of his time in many ways. Or even a generation before in some styles.
And of course, thanks to Tolkien, plenty of other fantasy writers have taken up that same conceit since him.
It was developed by a Brit who was working at CERN, a research facility in Switzerland, the place who’s peacefulness supposedly destroys innovation. Arguing that creating a research facility that attracts foreign-born innovators doesn’t count as encouraging innovation is simply bizarre; creating places where people who aren’t even in your country come to make innovations is encouraging innovation, not discouraging it with your nasty peaceful ways.
Also, doesn’t a cuckoo clock seem like a pretty complex technological device?
We are talking Middle Earth, not Hogwarts.
Most of middle earth does not possess magic, of those that do, most of it is not that kind of magic.
The only persons in middle earth that possess magic in that magnitude are not of middle earth, they are Miar or Quenya.
Gandalf, Radagast, Saruman, Sauron, Melkor,the Blue etc they are not human dwarvish or elvish nor are they of middle earth, nor are they existent in large numbers.
Sauron is here through following Melkor, no those two would not like anyone challenging their power, even Eru who could break the rules and bitch slap them
through the door of night if that was his way.
They ploy magic by main force, but that is not the norm, they are the exception.
Saruman forgets his place and becomes full of himself and dabbles a bit with it
but never makes it to full retard.
Gandalf and Radagast never use it to influence the world and aside from parlor tricks
make minimal use of it, they are even forbidden to match power for power with the corrupt Maiar.
So magic has little influence on the day to day life of middle earth.
No magic brooms or fireplaces, no spells to fix broken things and clear up messes.
And no all powerful wizards to keep everyone under boot heal.
Even Sauron must resort to raising physical armies and fighting through physical means because even his magic power has sever limits.
he can not rule middle earth using magic only by main force.
Nothing is prevented from happening due to magic.
If anything modern advances in technology don’t exist simply due to lack of need.
The people don’t perceive a need.
They are happy to plow their fields by hand, catch fish by hand etc.
Perhaps even take great pride in it.
They are perhaps a bit unrealistic as modern people go, but it is a story after all.
And it is not like it is without precedent, there have been real times and places where
the people remained mostly the same for a very long time, simply because they were happy as they were and did not feel any drive to make any great changes.
One other very important thing.
Most important thing actually.
The reader does NOT want the world to go making drastic changes.
The reader does not want middle earth to morph into a 1970 global industrial complex
That is not the story they came to read and so it is not the story Tolkien has written.