Either. A: Fantasy is inherently flawed from a perspective of biologically distinct humanoids, and all must be rendered down to an acceptable similar potential. Funny Hats.
Or. B: It is understood that different Fantasy biological humanoids can be faster/stronger/hardier or have otherwise 'magical' properties inherent to their type.
That's really it. Either it's acceptable (B) or it's funny hats.
The above post is a false dichotomy.
As if: Either the D&D race tradition is "acceptable" as-is, or else there can only be "funny hats".
There are so many problems with the above false dichotomy. For example.
In context, "funny hats" means the player is allowed to put the ability score improvement on a chosen ability at level 1. But it is already possible to put an improvement on the chosen ability at level 4. It doesnt matter if the character puts on a funny hat at level 1 or at level 4. The dichotomy is false because it actually claims, "Either there is only funny hats, or else there is only funny hats." The dichotomy is meaningless.
Furthermore, one can even posit that a D&D race actually is superior or inferior, smarter or dumber, and still accommodate floating ability score improvements. The Intelligence of any species will form a bell curve. The extreme outliers are less likely, but still possible. So, if a player wants to play an anomalous orc with an Intelligence score 20, no problem, because such orcs can exist. In other words, because of outliers, the same reason that a female human can have Strength 20 is the same reason that the orc race can have Intelligence 20. One can have both the narrative of D&D racial inequalities, and still empower players to float the ability scores wherever they choose. Thus the posts dichotomy is false because there is no dichotomy. It can be: both, and.
So far, the dichotomy insists, the default rule must punish players who want to play their chosen character. But the threat that the dichotomy imposes is both meaningless and false. Rather, it is ok for the player to play the character they want. D&D works fine, regardless.
The crux re racist tropes in D&D.
These fantasy races are defacto too much like reallife humans. When the game describes them, not by their amazing nonhuman abilities, but by their very human qualities, whether they are smarter or dumber, or stronger or weaker, then these definitions are defacto identical to the way reallife racists describe human "races".
If the definition of the elf race is the ability to do something amazing, like teleport, that seems impossible for any reallife human to do, then that definition of an elf isnt a racist way of thinking. But if the definition of an elf is to tend to be slightly more agile so as to be more likely to win in the Olympic athletic competitions, then that is the way reallife racists think.
Likewise, if the orc race had an amazing ability that seems impossible for any reallife human to do, then that ability would be a nonracist definition of an orc. But if the definition of the orc race is be "below average" Intelligence, and "above average" Strength, that is reallife racism.
These D&D fantasy races are pretended to be "nonhuman" species. If so, let us see these races be able to do things that are obviously nonhuman.
The way things are now, the Players Handbook races pretty much are racist definitions of what a race is.
The way things are now, the Players Handbook races are little more than funny hats. To get a +2 or a +1 to an ability score is a funny hat. It is something that can happen to a human.
To reduce racism in D&D, the solution is to get rid of all ability score improvements. These racial inequalities are problematic and occasionally offensive.
Instead, give each race a choice of feats that can do amazing things that reallife humans cannot do. It needs to be a choice from several feats, because if one feat turns out unintentionally racist, the diversity that is possible helps prevent reductionism to the one stereotype.
Nonhuman capabilities have little or nothing to do with reallife racism.
Feats that grant nonhuman features are no problem.