Explanation would be highly appreciated, but I think Larian just went "bah, modelling these pointy ears and these little men with giant beards takes too much time, let's just spam humans over and over". What a shame.
In-game, elves and dwarves bore the brunt of the war with the Black Ring when Damian got back to Rivellon. At least one group of elves was driven into hiding underground and eventually wiped out.
I don't think pointy ears and beards were an issue. Larian could have decided they didn't have the resources to have significant areas of other races, with differing animations, weapons, armour, character design, architecture, history, lore, inter-race quests and interaction, etc. Rather than half do something, or put in a couple token characters, they may have just focused on humans, since that area of Rivellon was predominantly human.
Then again, they could have wiped out the dwarves and elves just to reinforce how evil Damian and the Black Ring were, or how intense the war was. They could have just made a few references to other races withdrawing from the game locations, or simply not returning to rebuild after the war, etc, with little or no trade or diplomatic contact.
