I would think that The Scouring of the Shire would prove adequately that it's not a utopia... just a place with corrupt people like any other. Of course, it needed a little push in the wrong direction to become a smoldering hell-hole, but even before that, there were unpleasant people living there.

That being said, I love Hobbiton the most out of all of Tolkein's lands. Yes, maybe nothing important ever happens there (though I would like to see an ent make the trek over, because I think that would be a fascinating story in itself), but the hobbits are much more fascinating to me than any of Tolkein's other races, besides the wizards. Gotta love the wizards.