As a personal note, I have tried several times over the past few years to get into the Lord of the Rings trilogy, however I have never been able to be completely taken in by the works, whether due to language used or the density of the material. The Hobbit, however, I first read over ten years ago and enjoyed it immensely, and I enjoyed it even more the second time around.
What makes The Hobbit so enjoyable is that, despite the fact that it is readable by people of all ages, the story it contains nevertheless is very mature, and while violence and gore is almost non-existant, death is still a very real possibility. The personalities featured in this story are classics; Bilbo makes a wonderful reluctant hero, though he is far more adventurous and daring than than his hobbit nature would lead you to believe. Gandalf is the quintessential wizard, though he is far more gruff than modern depictions have led me to imagine.
What sets this story apart from most novels targeted towards young adults is the real sense of loss present in the story. Particularly with movies made in recent years, any sense of loss or threat is either completely absent, or minimized to such a degree that it can barely be called a loss. Often, the one character who dies is brought back to life, completely negating any sense of sacrifice. The Hobbit will have none of this: a main character dies in a selfish war brought on by himself, the hero of a town is murdered, the entire town destroyed, and a chain of events set into motion that will leave most of the world shattered or dead. Compare this to The Princess and the Frog, where defeating a madman channeling the powers of Hell only costs the life of a firefly. There is a reason The Hobbit has stood the test of time, it is a classic in every sense of the word.