One of the things that really bugged me, and this applies to ALL rpgs...
I decided to make a run as far north as possible, just to see what I could see, and from what I could tell, the environment was populated with basically higher level versions of the same crap I was fighting at lower levels. So instead of level 8 bears, it was level 30 bears or whatever. At one point I was running away from level 37 birds of some kind, but they weren't big birds or anything, they looked to be about the same size as a large crow or something, just apparently able to kill a full grown human. I'm not saying we should look for realism in fantasy worlds...but some things still need to apply. I don't know if this started with Japanese RPGs, with their "killer butterflies" and such, but I just can't get excited about fighting a level 60 Badger.
Necessary evil actually...there's just so much actual content that can be unique without creating a huge sinkhole for space. Believe me, as things progress, they may look the same, but those mobs will do things a whole bunch differently than their weaker brethern.
The other problem I had was that I ran all the way to Rivendell, and besides a couple pretty buildings, there wasn't crap else to do. I think frodo said a couple random things if you clicked on him, like "ooo I hope the gaffer found some topical ointment" or some such, but bilbo or gandalf wouldn't even speak. They just stare off into space.
Sure, you ran all the way to Rivendell, what level were you again? Considering that the bulk of Rivendell has quests for the 39-45 range, it's quite understandable that people under that will find little to actively do.
Beyond that, Rivendell has the splendor to which most people will just sit and stare at, especially jsut looking out over the falls as the sun sets. Sounds corny, but it's just nice to finally get a feel for a place that is supposed to be a sanctuary.
I agree, the waterfalls could do some overhead work, but for the most part I have seen a lot worse from a lot more complex and current-gen games.