In the first paragraph you attach race identity entirely to their racials and claim that there would be no reason to pick a race at all if it wasn't for those racials, in the next one you say people who only pick races because of their racials are scumbags. That's a savage self-roast.
I completely disagree on what defines a race. Race identity is 99% looks and 1% racials, if even that. You can tell that's a troll by the way it looks and animates, not by the way it has 20% haste for 10 seconds and regenerates 5 hp without you being able to do anything about it, you can tell that's a gnome because it's a midget, not because he can break a slow every minute and has 5% more intellect. Looks are what a race's identity consists of, not some neutered button you sometimes press or some underwhelming passive bonus. There are some flavorful racials like Cannibalize and Shadowmeld but they can't ever reach their actual flavor potential because they are racials, they have to be boring, watered down versions of the abilities those races are actually supposed to have. The issue with this kind of design is that you are attaching mechanical benefits to a choice that should be completely based on aesthetic and feel, pigeon holding the players that seek to get any advantage they can into playing very specific races, ****ting on choice, gameplay balance and all of this for almost no gain in gameplay diversity. Playing a human feels just the same as playing an orc mechanically, the only differences are that the human has more stats in the background that help him kill the orc faster.
This kind of design wouldn't be so atrocious if the balancing of the racials themselves wasn't so all over the place, especially when it comes to PvP. Entire races are complete trash in PvP, while one race is always at godlike status and since races are split into factions, the faction that the dominant PvP race belongs to always pulls ahead and ruins PvP balance. There's no salvaging this system, it's inherently **** and unhealthy for PvP as is evident by the arena stats in the Armory. The question then becomes how to get rid of the problematic racials while staying fair to all races and the cleanest choice in my opinion is to just axe all of them as they're as mechanically engaging as deciding whether you want to have an advantage or not.