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As far as I know, Tom Bombadil was hardly in the novel to begin with - Tolkien put him in at a later stage in the writing.
As much as it would have been nice to have him in the movies, Tom and the chapters involving him was an obvious thing to cut out from a movie version. He really contributes very little to the main story, and would have stopped the flow in the movie, too. And, as other mentions, non-readers would have been confused - they had more than enough to keep track of already!
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