I think Gloranth... uh, I mean some other past not open worlds did an excellent job of making cultures unique enough that there is great diversity just in playing humans, and can see RMS's point (and I'm thinking about that god thing).
But Races are part of what most people consider 'fantasy' settings, and I have no problem including them.
RQ originally had Elves and Dwarves and Trolls and whatnot, and those were accessible to people coming over from other games. In fact the races evolved into Aldryami, Mostali, and Uz and became quite different from the norm. However, being able to say to someone new 'this is an elf' makes them accessible to a new player - more so than 'this is an 'Freenhahrrhrri'.
A game may shy away from fantasy tropes to be unique, and so have unique races, such as the Freenhahrrhrri, when if fact the Freenhahrrhrri may have much more in common with the pointy ear pansies of standard fantasy than the Aldryami do (bunch of friggin vegatables that they are), but by giving them a weird name they are harder to accept.
So I really don't mind elves, dwarves, and trolls - it is just important to set them apart from the standard to give them their own flavor. Even Orcs are OK by me - just not Hobbits or Halflings - screw them.
