I remember Terry Pratchett's Nac Mac Feegle play with the concept as well. I remember in 3.x doing the math for Halfling carry capacity and pointing out that even with -2 Strength and 3/4 carry capacity, they were proportionally stronger than humans.
Some people don't like the "pint-sized powerhouse" concept, and I respect that, but Halflings and Gnomes (and to an extent, Dwarves) have always embodied it to some degree. 4e Svirfneblin could even have +2 Strength, which amused me greatly at the time.
So Halfling power doesn't bother me now (and Goliaths are still stronger, since they have a lot of carry capacity). But bounded ability scores does make it a bit more jarring, I admit, when Goliaths, Bugbears, and Firbolgs aren't any doughtier in melee combat than anyone else.
I've always wanted to include Large sized races in my campaigns (as well as Tiny ones) but balancing them has always been an issue. In 3.x/Pathfinder, just being big might let you use bigger higher damage weapons or have extra reach, and that almost assuredly makes big races so much better than medium ones for melee combat that it's hard to imagine why anyone wouldn't play one.
One thing I've always disliked is when a race ends up pigeonholed into being subpar at something. Like, every race is going to have all professions and (presumably) all character classes. The fiction sometimes even backs this up, with Orc priests of Gruumsh, or shamans- female Drow being priestesses of Lolth, etc.., but historically, those races tend to really suck at the associated character classes.
If a race has more Strength, they're just that much better at being Fighters- that's logical, but there are Elf and Halfling Fighters too, just as there are Goblin Wizards.
Being able to swap around your ability score bonuses kind of solves this problem, which I like...to a point. It does, however, feel a little odd that Orcs and Bugbears are no longer "strong guys".
What I would prefer, and what I think 5e could use is rules that let races be different but equal- sure, maybe Bugbears are stronger physically, but perhaps Elves have some advantage that lets them make up for this disadvantage and remain equal- like how Drizzt has never needed 20 Strength to be one of the Forgotten Realm's premier warriors.
This goes for casters as well. Sure, maybe Orcs aren't the brightest or wisest, but perhaps they have some special advantage that lets them, in their own way, be scary casters regardless (perhaps Gruumsh gives them a special blessing that lets them use Strength as their casting stat, or their damaging spells are more volatile).