Good questions, and, I'm sorry but, it's a long thread, and you made some really great points, so this is going to be a rather long post.
So a question--or challenge--for you. How would you re-work orcs to allow for the "brutal-savage-evil" type? Would you make them a sub-race? ("Gruumsh orcs"). And if so, how to portray their nature without the same language that you feel is racist-adjacent? Or if not a sub-race, but just "some orcs are like that," how would you do it? Would you just negate the issue entirely and generalize them to the point that no traits are assigned, essentially making them differently shaped humans that can be whatever the DM wants them to be? And would you apply it across the board, so that all humanoids are essentially just like humans in terms of the range of traits and cultures?
Actually, I think you largely answered your own question with this:
One other thing that separates gnolls from orcs is that they haven't been traditionally used as PCs, except maybe in deep supplementation. We have half-orcs, and other more recent fantasy venues (WoW) that have broadened orcs, so it makes sense to broaden them in D&D.
We don't really have to be terribly concerned about other races and whatnot because, well, no one is complaining about them. If we change orcs and people are happy, then job done. If we change orcs and then people move on to goblins, well, we can deal with that then. I don't see why we need to carve out one answer to rule them all forevermore right now. Let's just deal with what's the problem right now.
Part of the reason I ask is that one aspect of human vs. non-human in Fantasy Land--at least going back to Tolkien, but I think in the folklore--is the idea that humans are more diverse, they are the great "generalists," while non-humans are more specific, more formed around an archetype. Tolkien's elves, for instance, were essentially better versions of humans--more noble, artistic, intelligent, skilled, beautiful, etc--but also had something crucial lacking, perhaps the human capacity of self-determination. Thus you could talk about "elven nature" in a more specific way than "human nature." Orcs were the archetype of the twisted elf--a reversal of Iluvatar's most perfect creation. Dwarves were even more specific in that they were the creation of the crafter deity (Aule). Halflings were perhaps the most metaphorical race, in that Tolkien was obviously gently making fun of (an homage, really) his fellow English country-folk.
The point being, if we broaden each race in such a way that they become more human, they start losing their distinctness, their specificity. Furthermore, having non-human archetypes gives the freedom to explore various archetypes and What If questions without racializing it--if it is clearly understood that said non-human race is just that: not human. But if the point is to both de-racialize them (for those who make that connection) and bring them greater depth and complexity, how to do so without losing their distinctness? And if you use sub-races, wouldn't the same concern still apply or would the fact that "Gruumsh orcs" are one of many types negate the racial connotations?
Let's be fair here. The non-humans are caricatures. They aren't meant to be fully fleshed out. They are simply conceits in a story. And, really, so much of those conceits are grounded in people's own experiences and biases. I mean, is it really terribly hard to believe that an upper class English professor at Oxford, writing in the 1930's might hold a few ideas that are less than socially aware by today's standards? No one is accusing Tolkien of being a raging bigot writing KKK screeds. Of course not. What is being said is that because we are holding onto concepts that were written at that point in time, perhaps they aren't quite as socially conscious as they could be. Which brings me to Gygax:
/snip
But if that is enough for people to be happy, I think it really comes down to settings - and what fits the themes of that setting. If they republished Greyhawk, I'd hate to see them diverge too much from Gygax's vision. Meaning, Greyhawk should have Gygaxian orcs, not Mercerian or Bakerian orcs. FR can have its own orcs--and so too with every world. Let's not be monolithic, but allow creative diversity.
But in terms of the MM, it does make a statement about the default mode. How to depict that? "Orcs can be whatever you want them to be"...or do you go with examples of different types?
Again, here we've got someone, Gygax, who is writing as fast as his chubby little fingers can type to get a game out the door to meet this massive groundswell of demand. He's grabbing everything he can as fast as he can and stuffing it between the covers of books. In the early 1970's. Again, it's not really too much of a stretch, given the source material, to say that maybe, just maybe, the odd bit that was just a smidgeon culturally insensitive snuck into the game. I mean, come on, it was the 1970's, inclusiveness, cultural awareness and the like wasn't even on most people's radars at all. Worrying about colonialist biases in a game wasn't a concern then. Again, no one is accusing Gygax of being a raging bigot. He wasn't. And no one is saying that he was or that his writing was. But, again, it's not really a stretch to think that a writer, pulling from pulp genre fiction from the previous 50 years, writing in the 1970's maybe wasn't quite as culturally sensitive as he could have been.
Is it?
However, now, we have the benefit of forty or fifty years of the Civil rights movement and our views of history have changed. And they will continue to change. But, right now, we know that some of these elements are problematic for some people. So, yeah, cut out the problematic bits and see what's left over. Present orcs in official books in many different lights - good, bad, and in between.
Look, here is a link to a Greyhawk wiki on orcs:
Orc This is a good example of what NOT to do. This is pretty bad.
But, here is a different wiki article:
Orc - Greyhawk Wiki Now, there are still some problematic bits, but, that's a HELL of a lot better than the first one.