I think the confusion involves you taking a phrase out of context. If you read the lines before and after the phrase and the letter in response to that and Tolkien’s follow-up, you will see that he was clearly referring to the length of the material in terms of typing costs (he even talked about how much he had spent so far) and how he had become tired concerning the whole project. In fact, you did not even provide the whole phrase: “unfit for children (if fit for anybody)”.
That’s because he saw children in a special way. From the article I mentioned:
In short, the works are meant for everybody, especially children. The claim that he did not have children or even young adults in mind is questionable.
There is nothing in the complexity of the work that makes it unfit for children, unless particular kids can’t handle long works. As for dark themes, I recall one reviewer correctly point out that the works hardly contain themes concerning sex and religion, at least in contrast to much older works that inspired Tolkien.
Because I read the words before the line, the ones that came after “children,” and the rest of the letter.
So far, I’ve seen only the quote you provided, but he never talks about those “dark themes” in the letter, and the entire phrase is “quite unfit for children (if fit for anybody)”. The phrase continues where he states that LOTR isn’t even a sequel to The Hobbit (which implies that the sequel should also be considered). In the next sentence, he states that the whole thing is around 600,000 words long, and one typist insists that it is much more (in the sentence right before what you quoted, he wrote that he had already spent around L100 for typing costs, and he could barely afford them). That’s why he finds the project “impracticable” and that he is “tired.” In the P.S. to the letter, he even feels sorry that “Rayner” had read LOTR, but not to the “bitter end” because he had finished the last “book” only recently.
In response to that, the publisher asks if the length of the two books might be solved by separating them into three or four “self-contained” volumes."
So, you see, you took the phrase out of context. Tolkien and his publisher were not at all concerned with the unsuitability of the material for children but that the work was too long and too tiring and too expensive for the author.
BTW, “Rayner” refers to Rayner Unwin, Sir Stanley Unwin’s (the publisher) son. He served as a test reader for the publishers and gave a favorable report on The Hobbit at the age of 10. What about LOTR? They rejected it because “Unwins felt that [LOTR] had got out of hand as a children’s book and turned down the offer.”. It was accepted later but divided into three parts.
So, you see, the work was never intended to be for adults only or kiddie lit. Rather, it was meant for young and old, and with Tolkien’s view of children (see above). What’s more interesting is Tolkien’s view of the modern world, especially one where his work received a cult following, especially in the U.S. For details on that, read the article above.
To recap, the quote you gave is taken out of context. He was referring to the length of the work, and the tone of the letter implies that he was tired of having to spend on it. The context of the letters themselves (see the last article linked above) reveals that it was also the length of the work (600,000 words, and up to a million with The Silmarillon) that did not encourage the Unwins to accept the work.
There is nothing in what you presented that shows that LOTR is unsuitable for children.