I've honestly never seen a reason for humanoid monsters like ogres and hobgoblins to be shunned in society.
There is no right or wrong answer to how cosmopolitan your society should be. It would be interesting if the society was so cosmopolitan that 'werewolf' and 'medusa' fit into the category of 'people' instead of 'monster', and it would be interesting if they didn't.
Which ever way you go you risk giving up something important. The real danger of cosmopolitan is that if you embrass it the tendency is to emphasis the commonalities between different species to the point that everything is just a human in makeup and there are little or no tangible differences between the species. They share mostly the same outlook, the same culture, the same biases (or lack there of), and the same basic drives for companionship, food, mates, etc. In a cosmopolitian world, everyone is an alien but no one is really strange.
In a closed world, it lets you really emphasis the differences in outlook between the species. Dwarves, elves, and humans - to say nothing of wierder things don't have to share remotely the same outlook. For example, in my game elves are arguably more shunned in human lands than goblins, not because elves are necessarily bad, but because elves are more alien than goblins. Goblins and humans largely value the same things. Elves could care less about most things that humans value. The world isn't a jolly place were everyone gets along regardless of how long their race lives, their biology, or what their attitude to life is, or even a world divided into the nice beautiful races in their fight with the dark ugly evil ones. What gets along has much less to do with appearance than it has to do with innate characteristics. Elves live for centuries if not struck down by disease or violence - both of which they are uncommonly vulnerable to. They can literally commune with nature, and they'll probably outlast any possible material possession in a blink of an eye, and if you withhold beauty from them they'll literally die like if you withheld food from a man. They are therefore naturally incompatible with humanity.
In my experience, not holding on tight to the innate differences of the species and the conflicts they might create ends up leaking into the world you create to the extent that nothing - whether dragon or fiend or thing from the dungeon dimensions - isn't ultimately and fundamentally human in its portrayal. Sometimes this is intentional, but more often than not it surfaces as a sort of blindness, a fundamental inability to imagine anything different than yourself to the extent that you here some people argue that its only realistic for their to be less diversity between things of radically different biology than exists in real humanity.
I'd rather risk losing what you gain by readily making monsters accessible NPCs to have conversations with, than losing the identity of the monsters altogether. I'm not saying that you can't do both (troll bards, hill giant drovers, ogres in the city watch, and so forth), but that if you don't remind yourself what you stand to lose it can be really easy to lose it and not realize it.
