Bilbo continues to act as de facto leader for the group, convincing them to follow him down the long passage to the main chamber where Smaug may or may not be. Once there, he is the only one willing to venture out into the darkness to explore. This seems a bit silly on the part of the dwarves, and reinforces the (by now fairly well established) impression that they are not all that clever. Really, what is the point of staying in the dark at Smaug's bedside? Either he's not coming back (in which case no problem), or he is (in which case get out of there as quickly as possible).
Bilbo may have found a good purpose for the Arkenstone later, but (as he himself admits) he has really no excuse for taking it at this point. I wonder if the doubts raised in his mind by Smaug, have continued to work on him. If there is something that would be worth 1/14th of the hoard, which Bilbo could carry back with him to Bag End, it would probably be this.
When Bilbo is spooked by a bat and drops his torch, causing it to go out, he momentarily loses the confidence (and competence) that he has been showing for several chapters now, and reverts to the Bilbo we were introduced to at the beginning of the book, back in Bag End. Balin is once again the dwarf most eager to help out, but it should be noted that Thorin is willing to go rescue Bilbo when help is called for. Thorin seems to be pretty good at courage, even if he is not especially good at strategy or clever thinking.
This chapter has one of the only times when we read anything about the (presumably many, many) chambers which are NOT the main chamber that Smaug slept in, nor the little tunnel that led there from the secret door. Thorin leads them through the darkness by torchlight, to the Front Gate. They see bits and pieces of skeletons and the shattered remnants of what used to be a city of dwarves. It felt a bit like those scenes frozen in time at Pompeii.
I have read that earlier versions of JRRT's thoughts had Bilbo somehow killing Smaug himself. It would have been a lot more typical fairy tale if he had, but it is the fact that the central character does NOT do this, that helps to set it apart from the older stories that it is inspired by. Bilbo is not the person to kill your monster for you; he's the person to bring you intelligence, and help with diplomacy. These seem like things that a WW1 veteran understood the need for, far more than a medieval teller of tall tales.
Chapter 14