In Chapter 12, Bilbo comes face to face with Smaug. The dragon uses logos and pathos to discourage Bilbo from thinking that he has any chance of taking treasure from the lair:
“I don’t know if it has occurred to you that, even if you could steal the gold bit by bit—a matter of a hundred years or so—you could not get it very far? Not much use on the mountain-side? Not much use in the forest? Bless me! Had you never thought of the catch? A fourteenth share, I suppose, or something like it, those were the terms, eh? But what about delivery? What about cartage? What about armed guards and tolls?” And Smaug laughed aloud.
Smaug brings up some good logical points. Bilbo has nearly died many times on the journey to the mountain. Multiple times, he and the dwarves have lost ponies and struggled to hold onto their things. At times, they have had to haul unconscious members of their party on their backs. The idea of carrying even one-fourteenth of the massive pile of treasure all the way back to Bilbo's hobbit hole does seem like a major challenge. The dwarves intend to stay at the Lonely Mountain, so Bilbo will not even have their help to get it home.
Everything Smaug says to Bilbo is, on its surface, logical. However, below the surface he is also wielding pathos against the hobbit:
Now a nasty suspicion began to grow in [Bilbo's] mind—had the dwarves forgotten this important point too, or were they laughing in their sleeves at him all the time? That is the effect that dragon-talk has on the inexperienced. Bilbo of course ought to have been on his guard; but Smaug had rather an overwhelming personality.
Smaug cherry-picks the points he brings up and carefully leaves out all the evidence that the dwarves consider Bilbo one of their comrades. The result is that he makes Bilbo feel isolated from his friends. He feeds any seeds of insecurity lying in wait in Bilbo's mind until the hobbit begins to worry that the dwarves, not the dragon, are manipulating him to his detriment.
Neither the dwarves nor Gandalf nor Bilbo are innocent of manipulating others—not by a long shot. However, they typically lie and cheat in order to survive or in order to help their friends. For example, Gandalf manipulates the trolls into an argument that keeps them out in the open until the sun rises and turns them to stone. Gandalf's manipulative stalling tactic helps the dwarves survive the night without being cooked and eaten. The exchange between Bilbo and Smaug helps distinguish between the "honorable" manipulation the protagonists engage in and "evil" manipulation motivated by greed and hostility. Smaug is villainous because he manipulates Bilbo in order to hurt the hobbit so that he will leave the dragon to hoard his stolen treasure in peace.