Although Bilbo does have many heroic qualities, the argument could definitely be made that the hobbit is not a hero. He contributes absolutely nothing of value to the Battle of Five Armies, looking upon the fight "with misery" and viewing the possibility of defeat to be "very uncomfortable , not to say distressing" (255). Even though his friends and companions risk their lives to stop the surge of Goblins at the Gate, Bilbo sought higher ground among the elves "partly because there was more chance of escape from that point;" his actions reveal a very cowardly intent not only not to fight at all, hiding behind the protection of the elves, but also a premeditated plan to runaway and abandon his friends if the battle went poorly (255). His lack of loyalty to his friends may surprise the reader, but apparently his need for self-preservation outruled any deeper sentiments of friendship he may have felt.
Lastly, it must be pointed out that Bilbo never even had the chance to redeem himself in that battle, because an errant stone smacks him on the helm, rendering him unconscious for the remainder of the battle. His actions in the Battle of the Five Armies reveal Bilbo to be both lacking in loyalty and courage, two characteristics that a true hero should have in abundance.