As an academic, Tolkien was primarily a linguist, with a good working knowledge of Old English, Old High German, Old Norse, and the rest of it. In those days, there was also considerable interest in the relations among the various Indo-European languages and the ways that they changed over time. So it was a kind of science.
I imagine Tolkien turned it down because he thought he was not needed and that he had better things to do, such as endlessly working on the Silmarilion and its various component stories.
Tolkien obviously read the Icelandic historian/fabalist Snorri Sturlasson.
Snorri Sturalasson listed the names of the great Dwarves of Norse legend, and Tolkien copied them verbatim, even the order “Biffer, Boffer, and Bomber” etc.
Not that the guy was not A) original and B) a genius; but he borrowed extensively from other sources.