Character Analysis
The Sackville-Bagginses have been the enemies of Bilbo (and Frodo, eventually) ever since The Hobbit. We know that they are selfish, malicious, and generally up to no good. So it comes as no surprise that it is Lotho Sackville-Baggins who first opens the floodgates of the disaster that hits the Shire. He becomes so greedy that he begins exporting Shire-made products to the outside world (remember that Longbottom Leaf that turns up in the stores of Isengard in The Two Towers?).
In order to keep up production so that he can continue to turn a tidy profit, he has to force his fellow hobbits to work harder and harder—and for what? The hobbits aren't seeing any of the money, and they can't use the crops they are growing because Lotho is busily selling them away. All of this is standard cruel business practice. Sure, it's ugly, but it's nowhere near as bad as what happens next.
Because Lotho then invites in a bunch of Isengarders to keep the peace. And as Frodo points out, we are sure that Lotho never meant for these Isengarders to enslave the hobbits. He just wants to maintain a status quo and churn out profits. But the Isengarders soon go too far, ripping up houses and cutting down trees all over the Shire.
Once Lotho realizes his mistake, it's already too late: the Isengarders are much too powerful to control. And finally, Saruman himself arrives in the Shire along with Wormtongue, and that's the end of Lotho. He lives for long enough to see all of the damage that his greed has done to the Shire, only to be stabbed in his sleep by horrible Wormtongue. It's not a fate we would wish on anyone, even if Lotho is a class-A jerk. And it's a sign of Frodo's patience and wisdom that he finds it in himself to pity Lotho, too, no matter what happened as a result of Lotho's bad deeds.