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PJ caved in to his audience's meaner aspirations and lowered horizons, and his films are the poorer for it.
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That is certainly one very uncharitable way of looking at it.
Another way to look at is that Peter Jackson was not insane and decided not to make a $300 million dollar movie for a small group of people who clung to these ancient values and had not yet realized the world had advanced beyond the years of the great plague. In other words, he is a realistic man of his times.