I am not shocked. It is pretty par for the course. In our society we don't talk much about abuse.
I know, I guess you're right, but it's just like a constant, and it's always weirded me out that we have all these imaginative people here, and they can't imagine themselves into a situation where they weren't them, and couldn't get away with stuff?
Even just being a DM, you see power dynamics in play, you see how some people have louder voices than others (metaphorically and literally), and part of your job is to mitigate that. I've spoken about it before but one of my biggest "lessons from being a DM" moments was when I've foreman of a jury, and both times, I found I had to work, using skills primarily practiced in D&D, to ensure everyone on the jury got a fair hearing and to express their ideas without fear, and without being bullied by louder and more aggressive jury members.
And it was nothing new. So it does still somehow surprise me, despite you being right, that people, other DMs, don't get that.
racism and how it crept into his work
I mean, that seems like an understatement of a pretty extreme degree, and I'm not saying that to burn Lovecraft, who I think as a fascinating nutter, and such a powerless weirdo I judge him less for his racism than others. Lovecraft's racism, his complicated fear, even terror of the Other, absolutely shaped his work, in pretty fundamental ways. It's not like his dark force that occasionally crept in, or like a bad habit which just made some of it seem sleazy (which is how it looks with Asterix, say). It's a significant, kinda major part of his complex and highly unusual psychology. I also don't tend to think he really succeeded in promoting racist attitudes (I don't think he intended to either, in his work - it doesn't seem intended to convince), instead the incredible extremeness of his racism actually highlights the absurdity of racism (entirely accidentally), with the only people likely responding positively to the racist elements likely being pretty extreme racists themselves, everyone else being somewhere between mildly puzzled to outright vexed by them. But what I'm trying to say is I don't think his racism, particularly expressed as a broad fear of Otherness (other being anything except a narrowly-perceived White Anglo-Saxon Protestant East Coast world), "crept in" like it did with a lot of authors - I think it was an important part of why he wrote what he wrote. That doesn't make it a good thing, but it makes it a thing, and not something that can be separated from his work or seen as external to it, even though other authors managed to write plenty of Mythos stuff without it.
I think it's part of what made his work so weird that it's remained interesting to this day, and why it's been reclaimed by minority authors and others. We can certainly say he held incredible racist views whilst finding his work interesting. The fact that it's not propaganda or proselytization, and generally amoral stuff with no real "message" except "AAAAAAAAHHHHH THE UNIVERSE IS SCARY AND WE MEAN NOTHING" separates it from stuff like, say, C.S. Lewis' work, which was almost all proselytization, apologia or propaganda, all intended to "instruct" the reader and convey specific moral values. Racism in a work intended to instruct the reader (and there's plenty in Lewis) is much more pernicious and worthy of condemnation (and Lewis had bonus misogyny, sectarianism, anti-science rhetoric and so on).