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LoTR is unusual in that there are quite a few characters who are kind of rubbish, yet have a great background and really add to the character of the army. Case in point is Denethor who actually makes your army weaker and has nothing to offer in return. But... if I were putting together a Gondor army, it would be quite fun to have him sitting in the back lines, muttering in paranoia. Similarly, most of the hobbits don't really offer anything for their points, but at the end of the day, it's Lord of the Rings, you can't not have Merry backing up in Eowyn on the Pelennor Fields.

So, do you include the rubbish characters because they make the army more true to the story or do you leave them back at the camp?

Having never been one to go for WAAC or tournaments, fun characters are the core of my games. For example, hobbit units in war of the Ring aren't to great (Goblins are better than them IIRC), but because they're cool, guess whose dwarves are going to be supported by Hobbit Archers..

Hobbits arn't all that bad in the SBG. They make nice cheap archers to support another army. You can't argue with 4 pt bows that hit on 3+

And then there's fatty bolger, a few points for a dude with a fate point isn't bad really