I'm on board with those saying difference should be celebrated and not removed. Right now races feel just like customisation options in D&D. It has no flair, no real background. And yes, it may fit for player characters to be the exception to the norm, but if everything goes, nothing is exceoptional - a typical Larian BG3 issue - the NPC should be more cannocial with exceptions where needed for the story. Not a slideshow of exceptions.
I don't mind racism in a games lore - why can races be 'evil' (even to absurd degrees) but not 'racists'? Even many of our real life heroes are/were actually bigots and morons, so why not have fantasy characters with (serious) flaws? There is little that I hate as much as racism in real life and I don't want it glorified in fantasy, but like the typical there is no light without shadow, there is no acceptance without intolerance to make it stand out. Should it be a dominant trait of the lore? No. But honestly if the Gith, Drow or Mind Flyers wouldn't look down on the 'lesser' races, wouldn't it lose some of their factions characteristics? You can still have groups in those factions that break the norm and thus stand out (isn't Jaraxle's charm that he is and is not your typical drow?). I also don't think by avoiding difficult topics that a society is doing itself a favor. Having it in there, especially in fantasy were you can make it even more clearly emphasized how ridicolous the concepts behind racism are, I see no harm in it being a topic of a setting - if you handle it properly. Sometimes being a cliche can actually be even charming.
Back to Larian my biggest issue with their lore is the already mentioned issue of everything is sooooo special that it just becomes a meaningless blur. In EA as level 1 character you already see more rare creatures, utterly exceptional companions and races than most established heroes in their life time. It completely lacks any discression or subtlety how things are introduced and used. It feels like the whole first act is sprinkled with one-of-a-kinds...
