Having played in that era, I'll say the amount of stereotyping and redundancy that it created was not worth the trope reinforcement. If dwarves are typically LG, very religious and martial, why can't they be paladins? If halflings were nimble and rural, why not rangers? If elven art is considered peak, why are there no elf bards? Why can gnomes only learn magic if it's based on illusion? Etc etc. Even BD&D was not immune to this as the gazetteers introduced dwarf clerics and elf high magic to bypass race as class. It's also why there are 31 flavors of elf (one with ASI that matches each class option).
Believe me, after several years of it, most players were happy to see it go. Like level limits, it had become a rule that really only existed on paper as there were plenty of ways (official and not) to bypass it.