That's what WotC is reacting to. The notion that being half-something makes you a distinct species.
I think we are really mixing things here in an odd way though. I mean, human races and ethnicities ARE NOT distinct species. We are all human. Every person posting here shares the same humanity as anyone else, and their ethnicity or race doesn't change that at all. So if someone is half asian and half white, there is nothing substantially different from that person a someone who is all white or all asian.
But it still may be a very important part of that person's identity, their cultural experiences, etc. On the other hand, dwarves, humans, orcs, etc these are much more like distinct species. Sometimes they ideas from the real world (so I can see how someone playing a half elf and who grew up in a household that was dual culture, or has a mixed racial/ethnic background, would see something in that that resonates). But fundamentally saying something is half elven, isn't saying anything at all about people of mixed racial backgrounds. We say half elf, because we are humans and that is the default (I imagine elves would likely call such a person half human; or they might just say half human, half elf, or whatever).
This idea just seems extremely misguided to me. And the way it has been handled, is actually kind of offensive in my opinion (and I generally don't get offended unless something is very badly handled or done with bad intent). I don't think any ill intent was there, but to dismiss the term "half" overlooks how a lot of people experience life. It can be used in a bad way, but for a lot of people, it's an important part of who they are (and not the thing that defines them). It is a very paternalistic attitude that overlooks a lot of the nuances around how identity works.