Michael Jackson's "Thriller" is one of the best-selling albums of all time, yet nobody will ever convince me that he's a better vocal artist than Bing Crosby.
But I assume you'd agree that, at the very least, MJ is a 'great' entertainer?
As I said, I truly like the LotR much, much more than Hairy Potter. But I think both are fantastic. HP is more of a 'Michael Jackson'-type thing, absolutely. But it's great none-the-less.
And the concept I think you're missing is that of the 'fun' novel. Perhaps I'm misunderstanding, but you seem to be saying that only hard-core serious literature is worth reading -- and I *very much* disagree. Sometimes, a good, fast-paced action story can be every bit as rewarding as a classic.
Yes, my 10 year old daughter does enjoy reading serious fiction. She's loved the Hobbit, and is enjoying the LotR so far. In fact, her passion is poetry, and she's just 'found' e.e. cummings, which is some very experimental use of language.
But the Potter books are an entirely different type of novel. More akin to Robert E. Howard than J.R.R.Tolkein. More of a 'Stephen King'. As literature, Potter pales. As pure storytelling, it's far better than LOTR. The pacing is far faster, the characters are more sympathetic, more easy to relate to. Far less dialog and 'explaining' the story, far more action and 'acting out' the story.
And it's the pacing and the characters that make Potter 'better', in it's own way, than LotR. There's no characters in Tolkien for kids to 'relate' to, no characters in Tolkein who face issues like those kids do. The Potter books main reason for success, I think, is because so many kids relate to being a little kid who's picked on, like Harry, and then *love* the idea of finding out they're a powerful 'wizard' who can get back at the people who have tortured them, like Potter does to Dudley.