As you pointed out, its not that there is grind in LOTRO, its that LOTRO is the grind. There is one reason for that, and i dont think that devs are too blame for this. Lack of funding and lack of manpower on Lotro is the main reason. Turbine, over the years has always been spread thin on many projects of which only a few have been successful after Lotro. Some of them massive failures like IC. Currently Lotro is barely drifting above maintenance mode. WB doesnt care enough to fund them and doesnt care enough to shut them down.
When you are in a place like this, where you cannot release major updates that introduce varied content that can keep a player occupied for a longer amount of time without repetition, due to lack of funds, then you have to resort to a cheaper approach. And that is content repetition on a huge scale, aka grinding. Since this has been going on for a time now you go from end-game Lotro that can be seen as "GAME+grind" to "GRIND+GRIND".
This is why i see grinding for max Li only as a means to an end. That end being PVMP where its all about fun after the short gear grind (Aud gear is an awful idea) . If i were only a PvE player i would quit before starting. When i max my LI or acquire gear by grinding BBs, i always feel "dirty" somehow. Like i didnt earn it and i wasted time for the meaningless reward of having the same stuff like everyone else.
I miss the times when we had so much gear variety that even the non raid gear was good. Now everyone has everything and the best gear is the only "go to" gear in the game. Cheapens the game so much.
PVMP, raids, tough content, well written and well thought out quests create memories. Grinding BBs does not. Time spent grinding is forgettable and just molds into one big chunk of wasted time.. its killing time at its worst.