Is this the point where someone points out entire races and species are categorized as "good" and "evil"? Some are even color-coded so you can know if they're good or evil on sight?
There's a lot of stuff in the history of D&D that is not what I would call politically correct. A lot of stuff that makes people uncomfortable. And, generally I'm in favour of changing it. It's easy to add other human ethnicities and include male medusas and call them "lizardfolk" instead of "lizardmen".
I can see the issue with " race". But I can't think of a good replacement term. Species sounds too scientific, and doesn't seem accurate as some can interbreed (elves and humans, orcs and humnans). And "breed" doesn't sound much better. Heck, even "type" can be said negatively.
Really, this is a case of "euphamism treadmill" where a usable term is rendered unusable because of how we view the term and the negative connotations we're bringing rather than what the term actually says. The problem isn't with the term or game but with people being dicks to each other .
An example. Breed is a perfectly fine term for describing dogs and cats. Everyone knows you're not being biased by commenting on a particular breed as there are differences in appearance, physical abilities, and even inhtelligence between a St. Bernard and a pug and a border collie. But saying that about people crosses a line (and rightly so). However, different fantasy peoples can be as different as dog breeds, with the average member being tougher or faster or smarter. They can be as different from humans as Vulcans.
D&D races can be a bit funky as they include a cultural and physiological component. Dwarves aren't genetically superior with axes, but you can't have a dwarf raised by elves that's good with a bow. But stuff like that is easy enough to change and custimize. It's easier to adjust the baseline when you know what the baseline is. I mean, Vulcan logic is cultural and not innate but any Star Trek RPG would default to logical Vulcans knowing that will cover 95% of characters rather than presenting a complicated choice to accommodate the minority that want to be emotional Vulcans (or dwarves with a longbow).
I think you just did.
And you're right! Orcs? BAD! Kill them! Elves? Wait, what color is their skin? Pale? GOOD! Frolic in the woods with them! Dark? Is it a dude wielding two scimitars with a pet cat? No? EVIL! KILL THEM!
Overstated of course, and certain D&D stories bring much more nuance than this, but . . .
While it's easy to forget for those of us steeped in the genre, this is a problematic way of looking at sentient beings . . . at least for us "Social Justice Warrior" types and all.
Nitpick: "species" in real life can sometimes interbreed, because nobody can really agree on what a "species" is.
Even if it is a weird kind of fantasy racism. Other human-like options like Orc are inherently inferior, intellectually and morally, because of their ‘race’. This way of play has problems.

(Dungeons & Dragons)
Rulebook featuring "high magic" options, including a host of new spells.