Dwarves are too materialistic. They are materialistic to the extreme.
Elves dwell too much on the past so that it is difficult to understand how one is able to come across an elf that really has any hope for the future; they just seem to be insanely over-careful.
Hobbits are wonderful creatures, to be admired and imitated in their delight in simplicity, generosity, and the Good things in life. Their fault comes in caring nothing about what goes on outside their borders and believing that no evil in the world could possibly affect them.
Men just want everything. Materialistic like dwarves. Desiring foresight and immortality like the elves, but with that comes getting caught up and bogged down by the doom and gloom of the past. Having an appreciation for good food and music and Good Times like hobbits.
And of course, all races take pride in their own race and look down on all others. Dwarves mistrust Elves, Elves dislike dwarves and have no faith in Men, Men want everything everyone has and more, and Hobbits think Dwarves and Elves are strange and that Men are stupid.
And so you need a Dwarf like Gimli, an Elf like Legolas, a Hobbit like Frodo, a Man like Aragorn, encouraged and supported by a Wizard like Gandalf to all learn from each other and all become the ideal People, you know? Dwarves have to learn that there are more important things than gold, Elves have to learn that history does not ALWAYS repeat itself, Hobbits need to learn that their race is not superior to all others (but retain their wisdom in simplicity), and Men need to learn that they are weak, that they cannot and ought not play God, and to be happy with what they have, because in some ways, they have it best of all, provided they always aim to be the best person they can be with all that they have been blessed with.
Go figure I should aim to learn all that, too, eh? :D