Miniaturisation is not uncommon in nature: waist-high woolly mammoths hung on in a few Russian Arctic islands until the time that the ancient Egyptians built the pyramids. But people?
Labelling these people "hobbits" was a terrible thing to do, cheapening an important scientific discovery with yet another pop-culture reference. The argument over whether these small people were actually a different species of human or were Homo sapiens with some rather deastic health problems has gone on for some time.
Now, supposedly it's settled. The question that lingers, however, is this: How long did that species last? Are they still around? The locals have considerable lore about small people sneaking into their villages and ripping them off. But then, many cultures have "little people" stories. Are they folk memories of a time when small people co-existed with modern man? Are they stories of these small people of Indonesia, passed by story-tellers to the far ends of Eurasia?
It's all pretty bizarre.