Well, thanks, I guess. :-) It comes from having just finished reading The Book of Lost Tales. Seeing how the stories of the First Age changed over time from their earliest forms was *very* interesting. The Hobbit was written in the 30s; I suspect that some of Tolkien's concepts hadn't changed as much from their earliest forms of the teens and 20s as they did by the time LOTR was published in the 50s.
Rohirrim or Gondorians would probably see Beorn as something out of a child's tale
Well, The Hobbit *is* a child's tale. As I understand it, Tolkien made it up to tell his children at bedtime, and was eventually convinced to write it down in book form.
The one thing I do agree with about your comment is that the magic in Middle-Earth fades.
That's true, although in the earliest concept the Elves' "fading" meant something very different. And I find it very interesting that when the Hobbits are in Lothlorien, asking the Elves there about "magic", the Elves aren't quite sure what the Hobbits mean by the word. Even Galadriel, when she was showing her mirror to Sam and Frodo, says, "... this is what your folk would call magic, I believe; though I do not understand clearly what they mean ...."
It's things like that that cause me to wonder if Tolkien, over time, changed his own views on what was "magical" in Middle Earth, and therefore the early stories have things like shape-changing galore, while in the later stories "magic" is just a greater understanding of natural processes.
The original versions of the stories did have more of a fairy-tale feel, didn't they? Like Beren being captive in the castle with the giant cat? But you've also got things, like the Fall of Gondolin, that go perfectly with the tone of Silmarillion...