Like some of the other posts, I loathe the very idea of 'dismissing' any book on the terms that it might be considered children's literature. The strongest market right now in book sales is the young adult genre, and frankly, many of the titles and series over there are vastly more appealing than some on the 'adult' side.
The bottom line is that The Hobbitis more accessible literature in terms of reading level, but that in no way discounts its value as a text for higher level discussion. I have often thought that one of the best strategies when teaching higher level analysis to my students is to choose a book that may have a more accessible reading level. That way the students can focus on the higher level analysis, rather than the old "Umm...what did I just read? I didn't understand any of that!"
I tend to think that The Hobbit is lighter in tone than The Lord of the Rings, but I'll admit that it's been a while since I've read both. I think ask996 makes a good point that there's little reason to "dismiss" children's literature, particularly today when many of our most popular stories -- Harry Potter, Twilight, and the Hunger Games -- are marketed to children.
If we wanted to break any barriers between the two works, we could focus on similarities. For example, both works discuss heroism, and in both works, the hero at first appears very unheroic, but both struggle nevertheless. Both works have their roots in Anglo-Saxon literature. Both works portray the Shire is idyllic.
Whether or not people should dismiss children's books, they often do. This is one of the reasons for the perennial argument about whether or not books about a wizard named Harry Potter are literature. I often find that when I discuss certain books with college or AP English teachers I get, "THAT is a children's book!" End of discussion, no point talking about it. As a middle and high school teacher, this annoys me. That is one of the reasons why I posted this question.
First of all, it bothers me a bit that the term "dismiss it as a children's book" is being bandied about. This seems to imply that "children's" literature is less significant than "adult" literature. That being said, the more appropriate audience is going to depend upon the reader. What might be considered is where this book falls with regard to grade level using a readability test like Frye's.
The Hobbit has always been a great jumping off place and a wonderful springboard to literature on a deeper, more grandiose scale. I have often used The Hobbit and excerpts from it to teach literary terms and to get students on the same page with me before we move to deeper symbolism, etc. However, I wouldn't disregard The Hobbit as a book of substance, just as I would not say The Lord of the Rings is not for children. It is along the same lines of Alice in Wonderland and the sequels to this classic. There are many things to be found in both books...they can be enjoyed on the surface, and there is a richness to be dug up from under the surface as well...this makes it equally enjoyable and fun for both children and adults.
No, no, no! Definitely The Lord of the Rings is not a children's book in the same way that The Hobbit is, but at the same time I think The Hobbit has its appeal to adults in the same way that Harry Potter can appeal to both children and adults. Certainly, speaking as a reader of The Hobbit both in my childhood and in my adulthood, my appreciation has improved with time and I certainly look upon Bilbo's journey and transformation with more understanding now I am a bit older myself!
I don't think the Hobbit should be dismissed as a children's book. It is easier to read than the Lord of the Rings but it is still written with the same style and many of the same themes. I think if as an adult or an older reader you are interested in the Lord of the Rings, the Hobbit is equally worth the read.
I've always thought the Hobbit was easier to read with the Lord of the Rings being more difficult and more dense. So I think you could classify The Hobbit as more of a kids book than Lord of the Rings but it is still a pretty long narrative with a lot to keep up with. But I wouldn't "dismiss" it in some sense as not being worthy of an adult's time. To really enjoy the Lord of the Rings I think it is really somewhat vital as is a reading of The Symmarillion.