Well, im pretty sure the game would have been very fun if there was no racism involved.... *sarcasm*
Adding different races, and then having them dislike other races was just another way to make the story more interesting and crap. Yes, I admit that Wakka kind of annoyed me every time he talked crap about the Al Bhed, but towards the end of the game, he became more open-minded and stuff... They could have put racism into the game to help develop the different characters as well.