Clearly heavily inspired by Mentzer,
True that. But if you're going to copy, copy from the best!
There's a strong case for a 10-level Heroic Tier box set, but that would come at the expense of sales for the existing Essentials line. 5-levels is enough to get people hooked with ca 15 sessions of play, but still lead (most of) them on into the existing product line.
One product I would
love to see (though probably not as a Starter product) would be a 'digest' version of D&D. Basically, imagine a book the size and format of the current "Rules Compendium", but including everything needed for Heroic tier play - a small (but not overly limiting) set of races and classes, a smallish set of powers, and feats, and equipment, and magic items, a small amount of DM advice (complete with "page 42"), and a smallish set of monsters.
That is, one book giving a subset of the game that is, in some sense, 'complete' in and of itself.
Doing it such that they didn't feel the need to then heavily errata/revise it two weeks after release would also be nice, of course!
Personally I'd be happy to lose the non-human races, but I guess they don't take up much page count. I'd drop Halfling first, maybe replace with Half-Elf: IMO Half-Elf is the most popular non-human race choice (except in 3e where it was mechanically very weak), in my Loudwater game AIR there are 3 Half-Elves, a Human and a Genasi. Small races bring in some unwelcome complexity.
I agree that small races bring in some complexity. On the other hand, because of the LotR effect, I would be reluctant to drop halflings.
I
certainly wouldn't drop halflings for half-elves - the latter are just too close to full elves for comfort. To be honest, I felt that the 4e PHB was distinctly weakened by including three 'elfy' races - the elves, the super-elves, and the bit-less-elfy-elves.
If we were to replace one of the races, I agree that halflings should be the one to go. But for their replacement... I dunno. Actually, I can see a strong argument for Dragonborn getting the nod.
Dwarves are never very popular, although very much a D&D staple, I'd drop them next.
My mileage varies. Over here, Dwarves are extremely popular, and elves much less so. Of course, I'm still playing 3e, so that may adjust things. (And, of course, WotC will have the DDI information, so they should know which races are actually the most popular.)