[Rumil]

Demons, er no, except the odd Balrog

I can sort of see where GW are coming from in that Middle Earth is surprisingly quite restrictive in terms of roleplaying and fantasy miniatures. After the good guys, orcs, trolls, easterlings and haradrim and featured monsters what next? Iron Crown (MERP) ran into the same problem when they held the licence and invented all sorts of horribly un-canonical things.

However, 'Nameless things that gnaw the world beneath' and 'the Wild, where live strange things beyond reckoning' do give some leeway. Some beings are mentioned only in Hobbit legends, like Fastitocalon, the Mewlips etc, or in passing in the 3rd Age ie Giants, or 1st Age eg. Vampires, or even in early drafts eg. Pygmies, Fay and Ogres. Its unclear whether any/all of these were intended to still exist at the time of Lord of the Rings.