I also never cared for half-races really, although for a while I did use Half-Orcs to represent WoW orcs in D&D as opposed to using Orcs for Tolkien orcs. But for that, I actually made them completely unrelated races, with the term "half-orc" being used just because of their look.
I think one problem with half races is that part of the gamer base would like to have an open-ended list with a simple rule (i.e. pick any two races, and mix them up) while another part of the gamer base find it bland and wants each half race to have something unique, which inevitably requires more design attention and ends up with a short closed list of half races available. Similarly, many would prefer to have an interesting narrative for each race beyond the "mom and dad just had a one night stand...".
The DIY "build your own race" rules approach is also interesting... D&D has a strong tradition of being a class-based and race-based game, but while I believe that going class-less would destroy the nature of D&D, I would not have much problems going race-less. However, that pretty much means either that race mechanics and race narrative must decouple, or that every DM has to come up with a narrative for whatever combo the players adopt for their characters.
In brief, IMO there is no one-size-fits-all solution.