LPS also causes enterocytes (a kind of epithelial cell that lines the gut) to loosen the 'tight' bonds holding each cell to the other. Normally that'd be a barrier impermeable to the bacteria in the gut. Loss of that impermeability means the gut is a bit 'leaky', allowing some bacteria in the gut to pass into the blood stream (known as 'leaky gut syndrome). Different parts of the immune system react to different parts of bacteria (bacterial DNA, liposaccharides), none of them good.

Now that I'm thinking of it, part of the "blood brain barrier" is epithelial cells, holding together with 'tight' bonds just like the enterocytes. Pure speculation, but if LPS got to the BBB, it wouldn't be good... Just thinking aloud here.