I must say, I don't usually use the multiquote option this much... Oh well, this is interesting.
The buy in even for "racial classes" as traditionally been pretty high for pretty low output.
And realistically the number of campaigns in which you could use a dragon PC, a lycanthrope PC, or some other sort of 70%animal/30%human hybird or just plain old monster, are pretty low.
Making near-humans and humanoids out of these creatures makes them more plausible in the vast majority of games.
I'll disagree with the logic of your first point. The "it was weak before, so the concept is terrible" argument isn't a very convincing one. Simply improving the strength of the option would correct it, and that kind of balancing is an important aspect of every edition of the game. It is not like anyone thought abandoning the Fighter as a class concept was a good idea just because it was weak in 3E. I'll be the first to admit that the "race as class" idea has its flaws and is an imperfect solution, but there are better arguments against it.
I'll also disagree with your idea that race options like dragons, lycanthropes, or other non-humanoids are incompatible with the vast majority of campaigns. You present neither any evidence nor any logic to back that statement up. Without either of those, I'll simply reject the statement as you trying to over-generalize your own preferences. I, for one, would be happy to see such options.
Aye, but there's the rub. Some of us would like Wizards of the Coast to go easy on the "mythic inspiration" in the core of the new edition, so that we don't have to surgically extract it later. (Even after 5 years, I still have the occasional quabble with my players about why there are no Monks in ancient Egypt.)
I would prefer to have Core Rules that are generic and universally applicable to all campaign styles, and an assortment of accessories for different settings and styles. I'm not saying that aasimar, tieflings, minotaurs, warforged, etc., have no place in 5E. I'm saying that their place is in accessory books, not the core.
I don't really understand your point on several levels. I don't see the connection between mythic inspiration for the game and your issue with monks in ancient Egypt. I also don't really see the relevance of the "core vs. supplement" debate on this particular discussion (which I'm really extending to the broader game as a whole, not just some squabbling over the "core").
There is also the issue that I just don't like the argument that core must only contain a limited set of things that nobody hates. By that logic, the D&D core would only contain human fighters, and even then I'm sure someone around here would complain about how human fighters don't belong in their campaign! D&D's job is to present as many options as possible, not to exclude them in order to cater to particular tastes.
Ok, how about some examples to explain your point. What would your PHB race list look like and why would it be better than for example the union of 3e and 4e?
I'll say upfront that a lot of my arguments for why certain races would be better is summed up with a few guidelines, most of which rather honestly are just preferences on my part. I won't claim that these choices are better for
everyone, but they will certainly be better for me (and I would presume a non-trivial number of potential players).
Anyways, here's my preferences and/or assumptions:
1) Racial choice should have a significant impact on the game. More than just a few minor bonuses and stat mods, it should open the possibility of a significantly different game experience.
2) People who want to play something inhuman don't want to play a humanized version of the target concept. They instead want to play the actual target concept.
3) Intelligent creatures should not be arbitrarily divided into "playable races" and "monsters". For the most part, just because something is presented as a potential opponent shouldn't exclude it from being a player choice. Violent bigotry on the part of human peasants towards anything not very humanlike should not be a default assumption of D&D.
4) There are a lot of fantasy races out there with a lot of traction that are not usually seen or given a proper treatment in D&D.
5) Various "rubber forehead alien" style races distinct to D&D, like the Giths, are simply rather boring and tend to crowd out more flavorful and widely acceptable concepts. Some of these are just offensively bad.
As for the race list that I would propose (understanding that this is neither a suggestion for the PHB1 or an exhaustive list of what the game should contain), I'd propose the following.
Humans - Naturally.
Elves - They can be decent once in a while.
Dwarves - They can also be decent once in a while.
Halflings - Because their fans would lynch me if I omitted them.
Orcs - I see no problem with just letting them in as a main race, same as elves or dwarves.
Centaurs - I grew up reading Narnia, what can I say?
Werecreatures - I'd create a few variants, actually... I'd much rather have the interesting mechanics of transforming in a full beast form than the "be Wolverine from the X-Men!" style of the Shifters.
Minotaurs - They're a good candidate for a big and tough race that is still smaller than a proper Giant. Much better than a Half-Giant. Unlike a goliath, the name is more recognizable and their appearance is more distinctive.
Giant - Speaking of Giants, they would work quite well as a racial choice. Being big has its advantages and disadvantages, but it would be a very different experience than being a human. Sounds fun to me.
Pixie/Fairy - At the opposite end of the spectrum from Giants are these. Unlike halflings, they are small enough to make the concept fun. Just... please no more flavoring them as Tinkerbell knock-offs.
Angel - If you want a character associated with goodness and celestial cosmology, skipping past Aasimar and going straight to angels is the road I'd take. Since they are mostly humanlike anyways, I see no need to halfblood them.
Demon/Devil - A bit harder to justify than Angels, but still possible. Again, why use Tieflings if the pureblood version is mechanically viable?
Genie - To round out the planar set of races, we get the elemental version. Not too different mechanically from the Genasi, but better flavor.
Dragon - Because it just sounds like it'd be a lot of fun to play. I know this one would be popular.
Intelligent Animal - Too iconic to myth and fantasy to possibly ignore.
Nymph - Includes various varieties like Dryads and Nereids. Creatures of nature who draw strength from various forms of terrain. 4E proved that this can work, so it just needs to be generalized.
Merfolk - Iconic and makes oceanic campaigns a lot more viable.
There are a lot of other things I'd like to see, though many of those are a bit more campaign-specific. Warforged are a good race, for example. I could probably go on for a while, actually, but I'll stop here.