The Use of a Villain
Now, a story doesn’t have to have an external villain – hero vs self is a thing. However, there needs to be some antagonistic force causing the hero problems otherwise there isn’t a story, and it would be strange for a story of this type not to have an individualized external villain.
That having been said, The Hobbit has an impressive amount of conflict not tied to an individual villain or antagonist: There’s the internal conflict of Bilbo’s character development, there’s the political strife with Bard, and there’s the problem of the dwarves’ gold-sickness. However, The Hobbit has plenty of external conflict too: one villain who is a presence throughout the story (Smaug), an antagonist (Thranduil), a few of what I believe Joseph Cambell refers to as Gatekeepers (trolls, the Great Goblin, spiders), and a bonus villain at the end (Bolg).