I've toyed with something similar to this in my campaign already. All humanoids with the same subtype all dwell on the same island-continent, creating a "seperated" world. Then evolution takes over. Goblinoids for example: Goblins are the primitive, unevolved types, hobgoblins are the next step in their evolution, and bugbears are evolutionary throw-backs, the neanderthal types. But, I could achieve the same result with one "goblinoid" entry in the monster manual, with a level progression attached to it. Level 1 "humanoid (goblinoid)" = goblin. Level 2 = hobgoblin. Level 4 = Bugbear. If at any point, you want to "stall" the progression and advance by a normal class, Kapow, now you have a Lvl 12 Hobgoblin fighter.
I don't think I'm stating my point clearly, but the idea here is that the basic progression can accomodate all manner of "fluff". With a "monster" class for every creature type, any manner of critter can be created at any point along the progression. A Monster Manual set up this way would spell out the progression and the abilities gained at various levels, then present several fully statted examples for "drop and play" purposes.
So, there would still be racial HD, but it would be treated more like a "monster class" than an arbitrary number assigned to the supposedly new concept. The "base race" version of each monster class could be used by players (well, except for things like oozes, animals and vermin), thus eliminating racial HD and LA for potential PC races. Wanna play a frost giant, take the base "giant" race, give it blue skin and Kapow, Frost Giant PC. Sure, he's not 17 feet tall, only 8 or so, but fitting a 17 foot tall character into most dungeons is impossible anyway. Wanna play a Drow, take the base elf stats, slap on some black skin and white hair, and Kapow, Drow PC. Sure, you don't have SR and SLAs, but you look darn cool with those scimitars.
I think I've just convinced myself to do this for my games.
Thanks to the original poster for the idea.
