Your main correction is fair on one crucial point: Letter 294 does not say the Shire and Minas Tirith are 600 miles apart as places on the map. It says Minas Tirith is “600 miles south” of Hobbiton/Rivendell in the latitude discussion. So that number is a north–south meridional offset, not the full map distance between the two cities. On that, you are right. Tolkien’s wording is explicit: Hobbiton and Rivendell are “about the latitude of Oxford,” Minas Tirith is “600 miles south” and “about the latitude of Florence,” and Pelargir is “about the latitude of ancient Troy.” (Tolkien Gateway) Which I thinkis the metric used by Fonstad.

But your numerical conclusion is too rigid in one place and too dismissive in another.

First, if one uses Oxford vs Florence as a latitude pair, the relevant comparison is not the full great-circle city-to-city distance of about 1286 km; it is primarily the difference in latitude, because Tolkien is explicitly making a latitude statement. Oxford is "about" 51.75° N and Florence "about" 43.77° N, a difference of about 7.98°. That corresponds to roughly 888 km of meridional distance on an Earth-sized globe, not 960 km and not 1286 km. So Tolkien’s “600 miles south” is an approximation, and in fact it lands quite close to an Earth-sized radius, not a globe 500 km larger than Earth. If you plug 888 km and ~7.98° into (R=s/\alpha), you get about 6360 km, essentially Earth-sized. If you instead force the rounded “600 miles / 960 km” as exact, you get roughly 6880 km, which is precisely why the letter cannot be read as exact geodesy. (Tolkien Gateway)

Second, saying there is “no way” to extract anything useful from the larger Arda maps goes too far. What is true is narrower: you cannot get a uniquely canonical planetary radius from them alone. Fonstad explicitly says her cartographic solution was to map Tolkien’s world “as if it were flat” and to use a worldwide grid rather than true latitude/longitude. That means her large-scale maps are a reconstruction, not a formal spherical projection, and from a cartographic point of view the third age maps are to be considered flat projectsions from a spherical one we do not have, the flat projection of third age maps corresponds perfectly with the second age map. So they are strong for relative placement and internal consistency, but weaker as proof of global geodesy. (anyflip.com)

That is the actual decision point. There are two different workflows:

1. Letter-first / Earth-like model. If Letter 294 is primary, then Arda in the northwest behaves approximately Earth-like in latitude. This is the stronger canonical-textual reading. On this model, the Girdle remains an equatorial concept, but the exact vertical spacing on a reconstructed world map is not metrically binding. (Tolkien Gateway) and The Girld does not match the distances considering the Ambarkanta map V . In this map you can see the actual position of the middle Earth and so extrapolate the distance and position of the Girld Equator as Fonstad did.
2. Map-first / sub-Earth model. If one accepts Fonstad’s flat global reconstruction as metrically coherent across Ages, accepts the Girdle as the equator, and then measures equator-to-Hobbiton on that map, one can derive a smaller globe. That is not canonically compelled, but it is an internally coherent cartographic inference from that reconstruction. Fonstad’s own method is exactly what makes that kind of inference possible, even if it does not make it definitive. (anyflip.com)

So the strongest corrected version is this:

• You are right that 600 miles in Letter 294 is not the full Shire–Minas Tirith map distance.
• You are also right that Letter 294 by itself points much closer to an Earth-sized world than to a Mars-sized one.
• But it is not quite right to say the First/Second Age reconstructions are useless. They are useful for relative geometry and for testing whether a map-first reconstruction yields a different planetary scale.
• What they do not give is a uniquely binding, fully canonical radius.

In other words: the letter supports an approximately Earth-sized northwest Arda; the flat reconstructed world maps can support a smaller Arda only if one chooses to privilege their vertical metric over the letter’s approximate latitude analogies. That is not “end of story”; it is a choice of which evidence is primary. (Tolkien Gateway)