Revamping the content...
In more traditional MMO fashion, the story quests of Volumes 1 and 2 were designed with the intent of luring solo players into group content in order to see the unfolding story. Unfortunately, for reasons I've decried at length, this approach didn't really work because the solo and group player demographics just don't match up.
Starting with the Mirkwood expansion and the final Book of Volume 2, Turbine presented the epic storyline as soloable content, with a group epilogue that allows players to go back and tackle foes that the solo players could not conquer alone. They also announced a change, implemented a few months later, which would revise the Volume 1 content from the launch game to allow players to complete the content without the need for groups of players that simply could no longer be found. At the time, I wrote that it looked like Turbine was going to be using this approach going forward.
It took over a year after that to finish the job, but last month's patch finally gave the non-soloable portions of Volume 2 (Books 4-6 and Book 8) the solo treatment. The new Volume 3 quests that have been released since then have also been solo content, with a new optional side storyline leading players into the newly introduced group dungeons from the latest patch.
...to fit the audience?
Lord of the Rings Online is not a game that has had an overabundance of development resources; their decision to spend that limited time on removing the need to group for the game's core story strongly implies what those of us without access to the internal numbers can only assume from anecdotal evidence - that the audience for the game was simply not using the most crucial content because they were unwilling or unable to group to do so. Moreover, the decision to continue this process book by book for over a year until the work could be completed implies that they liked the results they saw with the earliest changes.
The MMO market in general, and LOTRO in particular now that it offers a non-monthly-fee option, is not what it used to be. Like it or not, the majority of paying customers are not interested in committing to raiding schedules that more closely resemble a job than a game. The longer this goes on, the less willing the market is going to be to tolerate being told that they don't get to see the central story of the game they're paying for.
This trend hit LOTRO first and hardest because it has always been a slower paced game that is more likely to appeal to a laid back solo player than a highly dedicated group player (who would quickly run out of content). That said, the competition is starting to respond in a similar, albeit less drastic, way to the same problem. If you look at the quests in the new zones of World of Warcraft's Cataclysm expansion, or in the newly-launched Rift, you will see an increasing push for exactly the same kind of storytelling - self-sufficient soloable zone storylines with the option to return for group content later.
In some ways, it feels like MMO storytelling is shifting to be less like chapters of a book and more like episodes of a TV show - the new storylines appear meant to stand on their own merits, rather than merely setting up the real story for the few who beat the toughest dungeons. Time will tell whether this compromise will prove satisfactory.