Yup, few people remember how few and far between big budget fantasy films used to be. Computer graphics have gotten cheap enough now that we see big fantasy sets all the time. Back when LOTR hit it was really rare for someone to cater to the fantasy crowd on the big screen, especially for a whole trilogy.

Much like the original Tolkien novels are a hard read but still seen as classics because they laid groundwork for the genre, the movies are seen as classics because they came first. They are probably Peter Jackson's best movies but that's only because he got even worse at editing as he went on.