That certainly sounds like a plausible spin on the revised 5E, yeah. Overhaul the core races to match the new approach, integrate the new Tasha's class features, de-emphasize or outright remove alignment, rewrite lore to delete any potentially objectionable content, and some other general adjustments here and there. Making it a celebratory edition also provides an excuse to move some non-core options into the core if they want (i.e. orcs). Then they can let the older core rulebooks, and any other rulebooks that strongly backed the old 5E paradigm (like Volo's), lapse out of print, where they no longer present a PR problem.
Funny enough, very early in 5E, they didn't seem to have an issue with different sizes for PC races:
Mearls rattled off stats for a half-ogre race on Twitter, for example. My guess is when it came time to start implementing such stuff officially, and actually began playtesting, the results led them to conclude that it was too hard to balance any race that deviated too much from the core. Hence the various workarounds (stretchy bugbear arms, large races being compressed to a very tall medium for PC versions, etc.).
There were other ways they could have made it work, though, like those noted upthread (such as comparing to enlarge/reduce). They could have also given Tiny races some extra features to compensate for their innate weakness; for larger size creatures, they could have built more races like the deep gnome, with a weaker base creature and more powerful stuff (large size, increased ASIs for size) only available as feats.
It's just disappointing they never tried to go beyond medium/small, because it leaves some older-edition monstrous PC options, like pixies, giants, and dragons, firmly in the realm of unofficial or homebrew material.
dnd.wizards.com
