Even in LOTR, Frodo had to check Lobelia's umbrella.
In The Hobbit, Thorin's dwarves had no problems throwing insults... "As soon as I saw the little fellow puffing on the mat... looks more like a grocer than a burglar."
In terms of the RPG, these were trespassing Dwarves insulting Mirkwood elves. If the dwarves were throwing insults at ther Vanyar, that would be different, no? Or at Elrond or Galadriel, perhaps.
In The Hobbit (which, really, this RPG is more based on than the LOTR) Thranduill's elves have their laughable moments. The butler and jailer snore together in a drunken stupor; the portcullis elves sing "Roll roll rolling down the hole, Heave-ho, Splash- Plump, Down they go, Down they bump."
Legolas's power and elegance notwithstanding, the Mirkwood Elves are a humbler, simpler, and more humorous race than the stuffy Noldor. At least, I always thought so.
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...down to the water to see the elves dance and sing upon the midsummer's eve.
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