The problem is, the community has said it wants certain things, and WotC has decided it wants other certain things, and those two sets individually would not be a problem, but collectively they are. WotC wants races to be as simple as possible. No fuss, no muss, no super scawwy complexity, no learning curve. The community at large wants to be able to enjoy the aesthetics they like, without feeling penalized simply because they happen to like those aesthetics and not others. (Note the "at large"--I'm sure you and your hundred gamer buddies who LOVE racial stat penalties really do exist, but the message from the community at large does not seem to agree with you.)
The former by itself would be fine--for a certain perspective on play--if simple, straightforward penalties and limits applied, e.g. orcs have a Cha penalty, Halflings are small and that kinda sucks in various ways, etc. The latter, likewise, would be fine for a certain perspective on play; racial differentiation ceases to be about stats and is instead about what each race personally/physically/magically does.
What causes a conflict is that WotC wants to strip away all complexity that doesn't belong to the spellcasting system, and doesn't want any racial features that are particularly complex. So...when that's combined with players not wanting major penalties because they felt like playing a suave orc instead of a suave elf, the only result that WotC is willing to consider or pursue is one that flattens out races into near nonexistence.
And this is without even touching on the "we need to be more sensitive about the subject of race" stuff. This is purely looking at each side's overall game design desires, and the negative consequence that results from trying to satisfy both things.
I am beginning to believe that, like with the "fast, cheap, good, pick two" trilemma, game design likewise has an inherent trilemma: broad, reliable, simple, pick two. You can have broad appeal on a reliable system...but it ain't gonna be a simple game. You can have broad appeal on a simple system, but the system itself is gonna be very rocky to use, nearly every game will be hugely different and that is a pretty steep cost for players to invest into. Or you can have something reliable and simple, but in order to do that, you'll need to focus on a target demographic--you'll lose universality, meaning the game just won't be very good for what some players want out of it.
Naturally, I'm of the opinion that a reliable system is more important than either breadth or simplicity, but if I have to make some sacrifices on something, it's probably going to be simplicity. But I'm also one of those people who thinks they should bring back the "two distinct product lines" strategy. Call them "Classic D&D" and...I still don't know what to call the other. "Modern" is already a loaded term (meaning "settings that resemble current-day Earth"), and both "Advanced" and "Tactical" have unacceptable implications (the former sounding like Classic is inferior, the latter implying that this crunchier D&D is somehow not a roleplaying game.)