This is pretty much how the races in my campaign originated. Rather than specially-bred slaves, the main races emerged from a base stock tinkering with its own genetics. The original culture was at about the same level as Eberron (or maybe even a bit more advanced) but eventually tore itself to bits in a big war. Civilization collapsed and a long dark age enveloped the world. Eventually the elves (who were the only ones to preserve any vestige of the original culture) got their act together and started "liberating" the world from the orcs and goblins that dominated it through their large numbers and bad attitudes.
What they don't tell anybody (and in fact most modern elves don't know) is that they started the war in the first place, and their main enemies (the goblins) were actually the original base stock that all the other races were developed from.
What they don't tell anybody (and in fact most modern elves don't know) is that they started the war in the first place, and their main enemies (the goblins) were actually the original base stock that all the other races were developed from.