My problem with this argument isn't just that Gale's support is inaccurate from a literary history perspective, but that her argument relies on a fundamentalism within the genre community of which I've grown quite tired. There is no "literary establishment" anymore. If it existed, and it was as rigidly structured as genre folks would have us believe, then I could not do what I am doing now: getting a PhD. in literature in an important English program at a large university which includes genre fiction as a component. The fact is that those silly walls have long since been cut down; the barrier now isn't whether there are professors interested in genre fiction, but whether there will ever be enough jobs specific to genre for those of us who want to spend our lives immersed in it for academic purposes (it may take some time for the field to have an explosion; literary fields go in cycles in academia).
But beyond that, there are a few points that I think need to be made to put Tolkien into perspective (in contrary to Gale's argument):
While it's true that Tolkien wrote The Lord of the Rings during the modernist period and published it at the (arguably) start of the postmodernist one, the notion that this strategy is wholly original, or a mark of a kind of originality that somehow implies "merit" from a narrative perspective, is somewhat shortsighted. Tolkien, of course, was writing a linear narrative, contrary to Gale's argument, but in a way that required multiple strands weaving together towards a common point (all of the narratives in LOTR move in the same direction: forward). But breaking up a story into strands, or even breaking up a narrative so that it does not follow in a straight, linear form, extends well into the periods that preceded the modernist one (one might even consider something like The Histories by Herodotus or The Decameron by Boccaccio as examples of this broken strategy at work, albeit in different forms).
Gale argues that Tolkien cannot have had a linear plot with a straightforward narrative because "the moviemakers would have little trouble translating that to film" otherwise. The problem? Cutting is a natural process of adaptation, and the degree to which Peter Jackson and his fellow writers had to trim out details from LOTR to make it work as a film only tells us about the level of detail Tolkien managed to produce. But this is no more a compelling reason to place Tolkien on a pedestal than any writer of history or any writer of exceedingly complex novels. You'd be hard pressed, for example, to adapt The Canterbury Tales or any number of less-well-known Romantic-era works (for lack of examples that aren't canonical).
But, again, Gale relies on these assumptions to suggest that Tolkien did not write simplistic, linear patterns into his work. Tolkien did write simplistic, linear patterns. What he didn't write were stories of a reductive world -- that is a story about a specific place pulled out of the wider global context. That's a far more compelling argument to be made about Tolkien than the unsupportable claim that Tolkien's very straightforward plot (evil ring is evil, the evil bad is eviling back, and the little hero must destroy the ring while the rest try to keep the world from crumbling) is anything but straightforward.
These assumptions also must be accepted to believe Gale's claim that Tolkien was obliterating formula when he wrote LOTR. The problem is that Gale also acknowledges the sources that Tolkien drew upon as a student of mythology, all of which influenced not simply his interest in writing mythology, but also the very structures of myth, fantastic narrative, an romanticism that appear in his work. What Tolkien did as a writer had been done before. What Tolkien did to the literary field hadn't. If we're going to think of Tolkien in the context of his greatness, then we have to do so primarily in terms of his actual achievements: worldbuilding and almost single-handedly creating a commercial genre.
Gale makes a lot of these arguments, often by speaking about unnamed critics who make arguments that most legitimate critics wouldn't make if they actually read books (example: Gale says that critics ignore the fact that Sauron is mostly a psychological presence; I suppose this would only be true if said critics believed Dracula was a dancing ballerina).
(Personally, I prefer the movies.)