This is unpopular by today's standards, but back in AD&D it was accepted that each fantasy race was actually different than humanity.
And it still is the case in most RPGs which are NOT D&D, because they are much less the targets of criticism for incorrect reasons, mostly due to some people not being able to differentiate fantasy from reality or making sure that they are not distinguished because it suits their "crusade".
Don't get me wrong, I am 200% in favor of the current trends in general (although not necessarily the way they express themselves, while at the same time totally understanding the underlying anger), in correcting real societal problems, but although the term of "race" wielded all over the place, it's scientifically incorrect, there are ethnicities but only one race of man.
And here we are not talking the same thing at all, we are talking fantasy
species, and as long as there is no potential confusion between fantasy species and real life ethnicities (so that no message is pushed even unconsciously), the SOUL of fantasy is still dealing with strange species and societies, and I see no reason for a ban on well built, interesting species.
And this is exactly what for example Runequest (my other go-to fantasy game for "lower" fantasy, although it links really well to heroquest for higher fantasy) does extremely well, I can play a "cannibalistic" morokanth (evolved tapir-man) shaman, or 2m tall fire-blessed agimori warrior, and play the race/species conflict there without being criticised by anyone. It's pure fantasy, it's an existential conflict linked to gods and powers and the world history and magic, there is not right and wrong, just irreconcilable opinions, it will lead to conflict and grand battles and heroics, etc.
But there we come to the core of the kender species, it's NOT well-built, because at its core all it does is encouraging a player to play like a wangrod. Honestly, they have NOTHING interesting, they are just miniature humans with wangrod-personalities, which are used by players to annoy other players.
Give me fantasy species/races with fantastical magical powers that have created societies and outlooks that make them not "human in funny hats", especially when these "funny hats" are actually only funny to ONLY ONE player, and really annoying to all the others.
I don't suggest exterminating kenders, but if players really want them in DL, they should ONLY be NPCs, so that the DM can use it with his impartiality and his desire to have the players at his table have a good time. Because I have seen otherwise good players, consensual and collaborative players turn at least sometimes into wangrods because they tried to roleplay a kender. It ENCOURAGES that behaviour, but it brings NOTHING interesting to the table.