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I can see it now... "PlayerRaceX is racist,.. they keep PvPing all us PlayerRaceY!!!" This kind of thing happened sooo much on FFXI...
Racism is actually pretty rampant in fantasy/sci-fi game design. I'm working on a genealogy of it now... as far as I can tell, computer games got it from DnD, which in turn inherited it from fantasy literature, which I believe got it from Tolkien.
Now, when Tolkien was writing it made sense, because racist thought was thought to be basically "true" (i.e. your race did define you in many important ways).
In these games racism is a core mechanic. You choose a race (species is more accurate) which defines how strong you are, what you're good at, how smart you are, what you're capable of, etc. That's racism.